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or  illuatratad  impraMion. 


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mathod: 


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Carnegie  Endowment  for  International  Peace 

oiwmoN  or  iconomics  ano  histort 

JOMH  MTM  CMlm.  DlMteTOn 


PFEl.IMIXARV  IXONOMir  STUDIES  OK  THE  WAR 


tDITID  av 

DAVID  KINLEY 

Irod-Mor  of  l-olltlcl  Eomioiny.  Inivmily  of  llhnnt, 
Montrr  of  t  ommlttre  al  Rcwvch  ot  itw  t  ndoumfiit 

No.  19 


PRICES  AND   PRICE   CONTROL    IN   GREAT 

BRITAIN  AND  THE  UNITED  STATES 

DURING  THE  WORLD  WAR 

■Y 

SIMON  LITMAN 

ProfcMor  of  Kconomici,   Univeriity  of  Illlnoii 


NKW  YORK 

OXFORD  UNIVERSITY  PRESS 

AMERICAN  BRANXH:    35  WEST32xd  STREET 

LONDON,   TORONTO,   MELBOURNE   AND   BOMBAY 

1920 


111? 


COPYRIGHT  1030 

■vrai 

CARNBOIE   ENDOWMENT   FOR 

INTERNATIONAL  PEACE 

WASHINGTON.  D.  C. 


THt  RUMFORO 
CODCOW 


9  9tUS7 


PRICES  AND  PRICE  CONTROL   IN  GREAT 

BRITAIN  AND  THE  UNITED  STATES 

DURING  THE  WORLD  WAR 


PRELIMINARY  ECONOMIC  STUDIES  OF  THE  WAR 

EDITED  BY  DAVID  KINLEY 
Fn4tuor  of  PoUlical  Eeommy,  UniwtrsUy  of  lUinoii 
Utmin  of  CommiUn  of  Retearch  of  Iht  Endawmtnt 

t    Ea«ly  Economic  E»r»CT»  or  the  Wak  upon  Canada.     By  Adam  Shortt,  formfrly  Commi«. 
■       .ionCT  or  tte  CaiuStan  Civil  Servicr.  now  Chairman.  Board  of  Hirtoncal  Publicationi, 

Canada, 
a    Ea»ly  Effects  of  the  European  Wa«  upon  the  Finance.  Commerce  and  Indi«try  of 

Chile.     By  L.  S.  Rowe.  Profeuor  of  Political  Science.  University  of  Penntylvania. 
1   \Va    Administration  of  the  Railways  in  the  United  States  and  Great  B;'"'n-    By 

Frank  H.  Dixon.  Profeiwr  of  Economic.  Dartmouth  College,  and  Julius  11.  Parmelee. 

Statiitician.  Bureau  of  Railway  Economics. 

4.  Economic  Effects  of  the  War  upon  Women  and  Children  in  G««*;  »»"*!"•,    ^y.''?"* 

Osgood  Andrews,  Assistant  Secretary  of  the  American  Association  for  Labor  Legislation. 

5.  Direct  Costs  of  the  Present  War.     By  Ernest  L.  Bogart,  Professor  of  Economics,  Univer- 

sity of  Illinois. 
6    Effects  of  the  War  upon  Insurance  with  Special  Reference  to  the  Sobstitution 
OF  Insurance  for  Pensions.     By  William  F.  Gephart,  Professor  of  Economics,  Wash- 
ington  University,  St.  Louis. 


By  Frank  L.  McVey.  President. 

By  John  A.  Fairlie.  Professor  of  Political  Science.  Univer- 

By  J.  Russell  Smith,  Professor  of  Industry, 

By  Thomas  Nixon  Carver,  Professor  of  Political  Economy,  Harvard  Univer- 


7.  The  Financial  History  of  Great  Britain.  1014-1918, 

University  of  Kentucky. 

8.  British  War  Administration. 

sity  of  Illinois. 

9.  Influence  of  the  Great  War  upon  Shipping. 

University  of  Pennsylvania. 

10.  War  Thrift 

sity 


Fffkcts  of  the  Great  War  upon  Agriculture  in  the  Ut;iTED  States  and  Great  Britain. 
By  Benjamin  H   Hibbard.  Professor  of  Agricultural  Economics.  University  of  Wisconsin. 


ij.  Disabled  Soldiers  and  Sailors— Pensions  and  Training. 
fessor  of  Social  Economy.  Columbia  University. 


By  Edward  T.  Devine,  Pro- 


13    Government  Control  of  the  Liquor  Business  in  Great  Britain  and  the  United  States. 
13.  ^""I'Yhomas  Nixon  Carver.  Professor  of  Political  Econon.y,  Harvard  University. 


14    British  Labor  Conditions  and  Legislation  during  the  War. 
Professor  of  Economics.  Ohio  State  University. 


11;,  Matthew  B.  Hammond, 


IS    Effects  of  the  War  upon  Money,  Credit  and  Banking  in  France  and  the  United 
States.     By  B.  M.  Anderson.  Jr..  Ph.D. 


16 


Negro  Migration  during  the  War. 
University.  Washington.  D.  C. 


By  Emmett  J.  Scott,  Secretary-Treasurer,  Howard 

By 


17    Early  Effects  of  the  War  upon  the  Finance.  Commerce  and  Industry  of  Peru. 
L.  S.  Rowe,  Professor  of  Political  Science,  University  of  Pennsylvania. 
•18    Chjvernment  War  Conmol  of  Industry  and  Trade,  with  Special  Reference  to  Great 
Britain  and  the  UnIted  States.     By  Charles  Whiting  Baker.  New  York  City. 

IB    Prices  and  Price  Control  in  Great  Britain  and  the  United  States  during  the 
i».  •'"'-^^^^^  ^^g      By  sj„o„  Litman.  Professor  of  Economics.  University  of  Illinois. 

•jo  The  Relation  of  the  Economic  and  Social  Conditions  in  Soithkastern  Europe  and  in 
AlJ«e-Sr.wine  to  Conditions  of  Peace.  Two  volumo.  By  Stephen  Pierce  Dug- 
gan.  Professor  of  Education,  College  of  the  City  of  New  \ork. 


•ai. 


The  Germans  in  South  America:  A  Contribution  to  the  Economic  History  of  the  War. 
By  C.  H.  Ilaring.  Professor  of  History.  Yale  University. 


*ji    Effects  of  the  War  on  Pauperism.  Crime  and  Programs  of  Social  Welfare 
Abbott.  Lecturer  In  Sociology.  University  of  Chicago. 


•JJ 


Monetary  Conditions  in  War  Times  in  India,  Mexico  and  the  Philippines. 
Kemmerer.  Professor  of  Economics  and  Finance.  Princeton  University. 


By  Edith 
By  E.  W. 


.4.  DIRECT  AND  Indirect  Costs  of  the  Great  World  War.     By  Ernest  L.  Bogart.  Professor 
of  Economics,  University  of  Illinois.     (Revised  edition  of  Study  No.  s.) 
•as.  Government  War  Contracts.     By  John  F.  Crowell.  Consulting  Economist.  New  York  City. 
•a6.  Cooperative  Movement  in  Russia.     By  E.  M.  Kayden. 

THE  CARNEGIE  ENDOWMENT  FOR  INTERNATIONAL  PEACE 

2   JACKS<1N    PLACE.   WASHINGTON,    D.    C. 

•  These  numbers  have  not  yet  been  published. 

iv 


EDITOR'S  PREFACE 


Professor  Litman's  study  of  prices  is  a  welcome  addition 
to  the  literature  of  the  subject.  The  general  trend  of  its  con- 
clusions, however,  will  not  surprise  a  student  of  economic 
history.  The  charges  of  profiteering  and  manipulation  which 
have  been  so  rife  in  the  past  three  years  are  paralleled  in  the 
experience  of  the  world  in  every  great  war.  Efforts  to  control 
these  movements  by  law  show  in  general  a  similar  history  and 
similar  results  on  all  occasions.  Here  and  there,  under  such 
circumstances,  a  government  is  able  to  catch  and  punish  a 
profiteer.  But  legal  action  on  the  whole  has  had  little  effect 
at  any  time  in  preventing  or  removing  the  evil  practices  that 
have  called  forth  so  much  popular  denunciation 

Still  more  true  is  it  that  the  legal  activity  of  governments, 
on  the  whole,  has  had  little  influence  in  fixing  prices  or  in 
keeping  them  stable.  Most  of  the  evidence  to  this  effect, 
when  carefully  studied,  shows  that  the  results  have  been  ob- 
tained in  occasional  cases  and  have  had  little  permanent 
effect.  The  truth  is  that  the  lines  of  economic  activity  for 
the  accomplishment  of  even  one  purpose  are  so  numerous  ' 
that  the  severing  of  one  usually  serves  to  render  the  others 
more  open.  Most  of  the  good  effect  which  the  agitation, 
legislation  and  legal  prosecutions  of  the  past  three  years  have 
had  in  this  field  has  been  a  result  of  psychological  rather 
than  of  legal  influences.  The  great  bulk  of  business  and 
popular  opinion  in  the  United  States  has  been  in  favor  of 
the  proposition  that  individuals  should  not  be  permitted  to 
make  undue  profit  at  the  expense  of  the  people  in  a  crisis. 
The  gooti  results  of  the  agitation  can  be  attributed,  therefore, 
to  the  general  high  standard  of  business  integrity  rather  than 
to  fear  of  legal  prosecution.  This  may  be  fairly  said,  making 
allowance  for  all  exceptions  in  the  way  of  successful  prose- 
cution by  the  officers  of  the  government.  It  was  a  realiza- 
tion beforehand  of  the  practical  impossibility  of  controlling 


VI 


editor's  preface 


the  situation  by  law  which  evidently  led  the  Food  Adminis- 
tration to  rely  largely  on  appeals  to  the  good  sense  and  patri- 
otism of  the  people  in  its  attempt  to  keep  the  prices  of  food 
stable.  To  have  fixed  prices  for  the  multitude  of  articles 
consumed  as  food  under  the  multifarious  and  daily  changing 
economic  conditions  would  have  been  futile  and  foolish.  On 
the  whole,  the  policy  of  our  government  was  sound  in  laying 
down  prices  for  certain  great  staples  and  relying  on  the  judg- 
ment of  the  people,  based  on  information  furnished  freely  by 
the  government  from  day  to  day,  to  see  to  it  that  they  were 
not  exploited. 

It  is  too  much  to  hope  that  another  generation  will  take 
to  heart  the  lessons  taught  by  the  experiences  recorded  in 
this  and  other  volumes  of  this  series  or  works  dealing  with 
similar  subjects.  Each  generation,  like  each  individual, 
must  learn  in  large  measure  from  its  own  experience.  Never- 
theless, history  shows  that  there  are  always  some  leading 
minds  who  are  able  to  exert  an  influence  in  a  new  crisis  in  the 
direction  of  sanity  and  safety  by  their  studies  of  similar  expe- 
riences in  the  past.  To  that  exit  nt,  at  any  rate,  we  may  hope 
that  the  influence  of  these  studies  will  be  helpful. 


David  Kinley, 

Editor. 


Urbana,  Illinois, 
July  i6,  1920. 


FOREWORD 

The  part  of  the  work  dealing  with  price  control  in  the 
United  Kingdom  was  finished  in  July,  1918;  that  which  con- 
siders prices  and  price  regulation  in  the  United  States  was 
begun  in  November,  1918,  and  concluded  in  June,  1919. 
Detailed  discussions  of  such  items  as  causes  of  the  rise  in 
prices,  profiteering,  industrial  unrest,  which  are  included  in 
the  treatment  of  price  control  in  Great  Britain,  are  omitted 
from  the  part  considering  price  fixing  in  the  United  States; 
this  was  done  chiefly  because  such  an  inquiry,  although  it 
would  have  presented  some  additional  illustrative  material, 
would  have  involved  too  much  repetition  and  lengthened 
considerably  the  study,  without  aiding  either  in  the  statement 
of  the  problems  or  in  their  elucidation.  On  the  other  hand, 
the  consideration  of  the  control  of  articles  directly  used  for 
war  purposes,  such  as  iron  and  steel,  copper,  hides  and  leather, 
etc.,  which  is  omitted  from  the  part  dealing  with  Great 
Britain,  is  included  in  the  investigation  of  price  fixing  in  the 
United  States. 

The  author  wishes  to  express  his  deep  appreciation  to  Pro- 
fessor David  Kinley  for  notes  and  other  material  which  the 
latter  gave  him  when  he  found  that  lack  of  time  would  make 
it  impossible  for  him  to  >'  i  his  share  of  what  was  originally 
intended  to  be  a  joint  undertaking. 

Simon  Litman. 


CONTENTS 
Part  I— Great  Britain 

CHAPTER 

,        _    .         _  PAGE 

I     Price  Control  in  the  Past , 

II     Movement  of  Prices  since  Outbreak  of  War     .  .  12 

III  Causes  of  the  Rise  in  Prices ,5 

IV  Profiteering ^ 

V    The  Condition  of  Workmen jg 

VI     Rise  in  Prices  and  Industrial  Unrest 92 

VII     Governmental  Control  and  Price  Fixing— Food  104 

VIII    Governmental  Control  and  Price  Fixing— Coal  142 

IX  Home  Production  of  Food  and  Minimum  Prices  151 
X     Criticism  of  Price  Fixing j^ 

Appendix  to  Part  I ,6^ 

Part  II— The  United  States 

I     Movement  of  Prices  during  the  War ^  gi 

II     Wages  and  Cost  of  Living jg. 

III  Legislation  Authorizing  Price  Fixing  and  Price 

Fixing  Agencies 201 

IV  Wheat,  Flour  and  Bread  ,10 

V  Sugar l'^ 

VI     Meat  and  Dairy  Products  -y.L 

VII     Fuel 7^ 

VIII     IronandSteel '.'.'.'.'.'.'.'.'.'.'.'.'.'.'..'.'.'.'"  1% 

IX     Nonferrous  Metals ^q^ 

X  Fibers  and  Textiles 298 

XI     Miscellaneous  Products ,q. 

XII    Conclusions g 

Appendix  to  Part  II „, 

Index ^^; 


PART  I 
GREAT  BRITAIN 


INTRODUCTION 

The  various  orders  issued  by  the  Army  Council,  the  Min- 
istry  of  Munitions,  the  Admiralty  and  other  l)odies,  to  whom 
authority  was  given  under  the  Defense  of  Realm  Act  to  fix 
prices,  are  not  included  in  this  study.   A  great  many  of  these 
orderswererequisitionaryin  nature,  and  although  their  indirect 
effect  upon  prices  for  the  civilian  p(»pulation  may  have  been 
important,  the  consideration  of  these  orders,  with  their  mi- 
nute provisions,  had  to  be  omitted  from  a  preliminary  study 
of  price  control,  th-  more  so  as  the  restrictive  regulations  of 
this  character  have  been  particularly  pronounced  during  the 
past  few  months  anc  seem  to  grow  with  each  succeeding  day. 
It  is  futile  to  try  to  keep  up  at  present  with  the  measures 
passed.by  the  Army  Council  within  whose  jurisdiction  are  the 
woolen,  linen,  rtax,  jute,  hides,  leather  and  hay  supplies,  with 
the  orders  of  the  Ministry  of  Munitions,  which  has  control 

over  iron,  steel,  aluminum,  copper,  etc.,  and  with  the  various 

other  enactments,  which  fixed  maximum  prices  on  matches. 

on  timber,  on  sulphuric  acid,  on  oils  and  fats,  and  on  many 

other  commodities. 

The  investigation  has  Ijcen  chiefly  confined  to  those  things 

which  most  \itally  affect  the  final  consumer  and  which  have 

provoked    the   greatest   amount   of   dissatisfaction    and    of 

discussion. 


CHAPTER  I 
Price  Control  in  the  Paif 

Agitation  against  speculation  and  the  middleman  is  not 
new ;  neith»  the  attempt  to  pre  en t  the  first  and  to  control 
the  latter  by  means  of  legislative  enactnituts.  As  far  back 
as  301  A.D.  Diocletian  undertook  to  fix  the  price  of  certain 
commodities,  but  his  attempt  proved  a  failure.' 

In  the  thirteenth  century  public  authorities  in  England  "  felt 
themselves  lx)und  toregulate  every  sort  of  economic  transaction 
in  which  individual  self-interest  seemed  to  lead  to  injustice  "» 
Forestalling,    engrossing    and    regrating,    practices   r<>.       y 
corresponding  to  the  more  mot'ern  sixrulation  and  to  the 
"evil  practices"  of  the  present  day  middlemen,  were  punish- 
able by  law.     By  the  command  of  the  king,  no  forestaller  was 
"suftcred  to  dwell  in  any  town";  such  a  man  was  branded  as 
"an  oppressor  of  the  poor,  the  public  enemy  of  the  whole 
community  and  country."'    Trade  regulations  were  guided 
by  the  gericral  principle  that  a  just  and  reasonable  price  only 
should  be  paid,  and  only  such  articles  be  sold  as  were  of  good 
quality  and  of  correct  measure.     Not  only  the  state,  but  also 
guilds  and  municipalities  acted  as  price  fixers  in  the  Middle 
Ages.     Most  enactments  were  promulgated  at  that  time  for 
the  purpose  of  preventing  some  particular  form  of  fraud  in 
some  particular  commodity.     But  there  were  a  number  of 
measures  passed  more  general  in  character.     Economic  con- 
ditions in  the  Middle  Ages  were  such  that  individuals  if 
unrestrained  by  law  could  easily  obtain  a  temporary  monop- 
oly over  any  of  the  basic  products.     The  supply  of  these 
was  usually  obtained  by  the  consumers  from  comparatively 
few   neighborhood   communities.     The   establishment   of   a 

p   lii^'  °^'''"'      '*  ^'"^^  ^'""^  Possible,"  The  Independent,  October  ao,  1917, 
1  iKi)'  •^*'''''>"  E.ngUsh  Economic  History,  vol.  i,  pt.  i.  p.  181. 


t*"^ 


rRICKl  AND  PRICE  CONTROL  Dl'RlNti  THE   WAR 


"  corner "  in  grain  or  in  any  other  product  was  under  such 
circumstances  not  a  difficult  matter. 

An  attempt  to  control  tmth  the  wholesale  and  the  .etail  price 
of  wine  by  Axing  a  maximum  wa*  made  by  the  British  Govern- 
ment in  1 199.  The  measure  faile<l'  and  in  1,130,  after  a  long 
period  of  ineffectiveness,  a  new  law  was  |>assed,  which  re- 
quired the  merchants  to  sell  at  a  "reasonable"  price,  the 
lattfr  to  l)e  based  on  im|x»rt  price  plus  cx|H>nses.  This  new 
measure  of  control  proved  as  futile  as  the  old  one,  and  in  a 
few  years,  l)ecause  of  changed  conditions  of  pnxluction  and 
trade,  the  price  of  wine  went  up  far  Ix'yond  what  it  had  been, 
as  well  as  beyond  the  government  expectations. 

A  result  similar  to  this  folluwwl  the  many  efforts  to  regulate 
the  prices  of  wheat  and  breafl.  In  this  instance  the  govern- 
ment endeavored  to  fix  not  a  maximum  price  but  a  sliding 
scale.  The  first  attempt  was  made  as  early  as  1202.  The 
most  im|M)rtant  ordinance  on  the  matter  was  51  Henry  III. 
This  ordinance  fixed  changing  weights  lor  the  farthing  loaf 
to  correspond  to  six  penny  variations  in  thi-  price  of  the  quar- 
ter of  wheat  from  twelve  pence  to  twelve  shilling  .  The  law 
was  enforced  locally  on  sundry  occasions,  but  fell  gradually 
into  disuse. 

Of  |..irticular  interest  is  tl  more  recent  experience  with 
maximum  prices  which  France  underwent  at  the  close  of  the 
eighteenth  century.  The  first  law  establishing  a  maximum 
was  passet!  rm  May  3,  1793.  It  was  one  of  the  extraordinary 
measures  adopted  by  the  Committee  of  Public  Safety,  along 
with  a  progressive  tax  on  the  rich  and  forced  loans.'  Spurious 
decrees  of  the  National  Assembly,  ordering  the  people  not  to 
pay  more  than  one  sou  for  a  pound  of  bread,  were  ciiculated 
as  early  as  March  and  April,  1790.'  The  May  law  was 
passed  in  order  to  curb  speculation  and  profiteering,  as  well  as 
to  assure  comfort  to  the  poor.*  The  committee  promulgated 
it  under  the  pressure  of  public  opinion.     The  necessity  for 

'  .\»hloy:   op.  cit.,  p.  191. 

'  I.  R.  M.  MacilonaM:  A  H'.  lory  of  Frnncf,  vol.  iii,  p.  31. 

•  Kriipotkin:  The  Great  French  Revolution,  p.  207. 

•  Ml),   is:    The  Fre  ih  Heivlution,  p.  100. 


(.REAT   RRITAIK  • 

passing  such  a  law  of  maximum  had  Ut-n  hintitj  at  by  Saint 
Just  in  the  latcrr  part  of  ijg3.^ 

As  a  result  of  overissue  of  paper  money  and  the  hicxkade, 
an  intolerable  economic  situation  Kripixnl  the  country  and  led 
to  widespread  dissatisfaction;  many  jK-titions  had  Utn  pre- 
sented to  the  government,  reciuesting  it  to  take  some  definite 
action  in  order  to  stop  the  rapid  risw-  in  pricin.' 

The  decree  of  May.  179.V  applie<|  to  grain  and  flour,  and  it 
providcfl  that  in  each  department  the  price  should  Ix'  the 
average  of  local  market  prices  which  pre\  ailwl  from  January 
to  May.     It  was  made  a  penal  offense  for  the  farmers  to  dis- 
tinguish lietween  payments  in  assignats  and  in  coin.     Thanks 
to  an  abundant  harvest,  the  proletariat  of  the  cities  was  in  a 
measure  supplied  with  bread,  but  the  difficulties  grew  from 
day  to  day:  farmers  were  inclined  to  kitp  their  grain  away 
from  the  markets,  and  in  several  departments  the  enforcement 
of  the  law  was  abandoned  by  the  close  of  August.  1798.  it 
Ix-ing  generally  recognized  that  this  first  ex|H-riment  with  the 
maximum   was  a   failure.'     Popular  uprisings  were   taking 
place  in  different  parts  of  France.     In  Saint   Etienne-en- 
Forez  the  people  killed  one  of  the  m«.nopolists  and  appointed 
a  new  municipality,  which  was  comixlled  to  lower  the  price 
of  bread;  but  thereupon  the  middle  classes  armed  themselves 
and  arrested  many  of  the  nU-ls.*     The  Paris  Commune, 
having  obtained  large  grants  from  the  convention  for  the 
purchase  of  flour,  succeeded  in  '  fping  the  price  of  bread  to 
three  halfpence  a  pound.     The  ;  ommune  was  paying  to  the 
holders  of  wheat  high  prices  at  the  expense  of  the  state.     To 
obtain  bread  at  the  low  pricL.  people  were  compelled  to  stand 
m  long  line  for  hours,  often  through  the  night,  at  the  baker's 
door.' 

When  it  .ame  to  the  reconsideration  of  the  May  measure, 

■  Cambridge  Uodrrn  History,  vol.  8.     The  French  Rnolulion. 
/•£iji>,%'8^'-;«.?;:7p""^7^  "  fl-ra^/j-r  de  la  Revolution  e,  de 

I9I7^°pTfo.  "''^''"''""""  P""»  '"  France.''  American  Historical  Reiiew.  October. 

•Kropotkin:   o/>.  a'/.,  p.  ao8. 
•  Ibid.,  p.  37a. 


8 


PRICES  AND   FRICE  CONTROL  DURING  THE  WAR 


the  Girondjns  declared  themselves  as  opposed  to  any  price 
fixing  scheme,  but  their  opposition  was  swept  aside  by  the 
Montagne,  who  considered  that  the  salvation  lay  not  in  the 
retraction  of  the  measure  but  in  its  expansion,  so  that  it  should 
include  all  primary  necessities.  The  extremists  (Varlet, 
Jacques  Rout)  were  agitating  for  the  communalization  and 
nationalization  of  all  commerce,  and  for  the  organization  of  an 
exchange  of  all  goods  at  cost  price.'  On  September  1 1,  1793, 
a  plan  was  adopted  of  fixing  a  uniform  price  for  commodities 
for  the  whole  country,  .naking  allowances  for  the  cost  of 
transportation.  This  plan  was  soon  abandoned  and  the  law 
of  September  29  promulgated,  decreeing  that  prices  should 
be  local  prices  of  1790,  plus  one-third.  This  system  also 
proved  unworkable,  and  on  November  i  the  convention 
decided  that  prices  should  be  based  upon  those  of  1790  at 
the  place  of  production.  To  these  prices  were  to  be  added 
one-third,  plus  a  rate  per  league  for  carriage  and  five  per  cent 
for  the  wholesaler  and  ten  per  cent  for  the  retailer.'  Public 
authorities  had  a  right  to  compel  farmers  to  bring  grain  to  the 
market,  where  it  could  be  bought  at  the  meiximum  price.  A 
study  of  the  situation  shows  that  by  means  of  such  com- 
mandeering or  requisitioning,  French  cities  were  kept  pro- 
visioned with  grain  during  the  last  half  of  1 793  and  the  larger 
part  of  1794.  It  is  obvious  that  such  a  system  of  force  could 
be  successful  for  but  a  short  period.  Commandeering  of 
supplies  was  not  conducive  to  keeping  farmers  at  work, 
neither  was  the  provision  of  the  law  setting  definite  margins 
to  distributors  conducive  to  their  staying  in  business.  The 
merchants  had  no  interest  in  buying  at  the  maximum  in  one 
place  and  transporting  commodities  to  another  when  they 
were  obliged  to  sell  at  the  same  price.  Thus  the  accusation 
brought  against  farmers  that  their  greed  defeated  ..ne  law 
was  not  wholly  justified.  Many  of  them  after  they  brought 
theit  grain  to  market  were  not  able  to  find  any  one  willing  to 
buy  it.     In  criticizing  the  law  of  the  maximum,  it  is  well, 

'  Kropolkin:  op.  oil.,  p.  373. 

'  Bourne:  op.  cit.,  p.  1 13.     See  also  Bourne:  "Food  Control  and  Price  Fixing  in 
Revolutionary  France,"  Journal  of  Political  Economy,  February  and  March,  1919. 


GREAT   BRITAIN  g 

however,  to  remember  that  at  the  time  of  its  promulgation 
the  economic  condition  of  France  was  most  wretched.     Those 
of  the  historians  who  like  Levasseur  or  Taine  see  in  maximum 
measures  nothing  but  illustrations  of  violence  and  adminis- 
trative incapacity  overlook  the  enormous  difficulties  under 
which  the  government  of  France  had  been  laboring.     France 
was  blockaded,  attacked  by  the  armies  of  combined  Europe, 
torn  by  internal  dissentions.     France  was  in  a  condition 
where  one  department  distrusted  another  in  the  matter  of 
food  and  where  the  flood  of  paper  money  was  preventing  a 
proper  exchange  of  commodities.    Although  proven  unten- 
able for  any  length  of  time,  the  maximum  seems  to  have  at 
least  partially  succeeded  in  alleviating  the  misery  of  the  urban 
proletariat.     It  is  true  that  food  was  scarce  and  of  poor 
quality  and  that  many  unfortunate  farmers  and  dealers  who 
refused  to  put  their  goods  on  sale  at  legal  prices  were  dragged 
by  sans  cullotes  before  the  Revolutionary  Tribunal'  and  put 
to  death,  but  it  is  difficult  to  say  how  many  of  them  would 
have  met  a  similar  fate  without  the  law  and  how  far  the  in- 
furiated mobs  would  have  gone  in  their  work  of  vengeance 
and  destruction  if  no  maximum  was  on  the  statute  books. 

The  temper  of  the  Paris  Commune  may  be  realized  if  one 
reflects  on  the  fact  that  when  in  September,  1793,  the  pr-e 
fixing  law  was  being  discussed  in  the  convention,  the  munici- 
pal council  of  Paris  voted  to  proceed  to  the  convention  in  a 
body  and  demand  the  creation  of  a  "revolutionary  army, 
which  should  march  whenever  necessary  to  thwart  the  ma- 
noeuvres of  egoists  and  forcstallers  and  bring  them  to  justice— 
to  force  avarice  and  cupidity  to  disgorge  the  riches  of  the 
earth. "2 

One  of  the  results  of  the  maximum  was  the  growth  of  con- 
traband trade,  which  reached  <  normous  proportions.  Butter 
eggs  and  meat,  particularly,  were  peddled  in  small  quantities 
by  resellers,  and  it  was  practically  impossible  to  control  the 
prices  charged  by  such  persons,  who  "made  their  way  into 

'  Shailer  Mathews:    The  French  Rei'olution,  p.  247 
l9.?,°p.T,3.  ■"  ^"^^'  '"  ^™""'"  ^'"'"^''»  Historical Review.OcXohf^r, 


10 


PRICES   AND   PRICE  CONTROL   DURING  THE  WAR 


alleys,  to  the  doors  of  apartments  and  to  the  service  entrances 
of  the  rich."'  The  growth  of  the  contraband  trade  was  one 
of  the  contributing  causes  which  made  the  law  unpopular. 
With  the  defeat  of  the  extremists  in  the  convention  the 
measure  was  doomed.     It  was  repealed  in  December,  1794. 

On  the  American  continent  efforts  to  control  prices  can  be 
traced  to  colonial  days.  Weeden  in  his  Economic  2nd  Social 
History  of  New  England  relates  of  the  price  of  beaver,  esti- 
mated by  the  governor  and  council  of  New  England  at  6s.  in 
fair  exchange  for  English  goods  at  thirty  per  cent  profit,  with 
the  freight  added.'  This  was  in  their  opinion  a  normal  value. 
The  scarcity  of  corn,  which  sold  at  los.  "the  strike,"  led  to 
the  prohibition  of  the  sale  of  this  food  to  the  Indians.  Under 
the  pressure  of  this  prohibition,  beaver  advanced  to  los.  and 
20S.  per  pound,  the  natives  having  refused  to  part  with  beaver 
unless  they  were  given  com.  The  court  was  obliged  to  re- 
move the  fixed  rate,  and  the  price  which  ruled  was  20s. 

Another  fruitless  attempt  at  regulation  referred  to  the 
price  of  labor.  Carpenters,  joiners,  bricklayers,  sawyers  and 
thatchers  were  limited  to  2s.  per  day.  Any  one  who  paid 
more  or  received  more  was  to  be  fined  lOs.  Sawyers  could 
take  4s.  6d.  for  one  hundred  feet  of  boards,  at  "six  scoore  to  ye 
hundred,"  if  the  wood  was  felled  and  squared  for  them,  with 
IS.  extra  if  they  felled  and  squared  their  own  timber.  Again, 
master  carpenters,  masons,  bricklayers,  were  limited  to  i6d. 
per  day,  plus  bqard,  and  the  "second  sort"  to  I2d.  These 
regulations  were  enforced  for  about  six  months  and  then  were 
repealed.'  To  offset  fixed  wages,  "the court  in  1634  limited 
the  rate  of  profit  at  4d.  in  the  shilling  of  cash  cost  in  England 
on  all  importations  of  provisions,  clothing,  tools  or  commodi- 
ties, except  cheese,  wine,  oil,  vinegar  and  liquors,  which  were 
left  free  on  account  of  the  extra  risk  they  occasioned."*  In 
1635  the  statutes  limiting  profits  and  fixing  rates  of  wages 
were  repealed. 

'  Bourne:  op.  cit.,  p.  112. 

« \V.  U.  Weeden:   Economic  and  Social  History  of  New  England,  1620-1789, 

p.97- 
•  Ibid.,  p.  99. 
*Ibid.,  p.  118. 


GREAT   BRITAIN 


II 


In  171 1,  when  Walker's  expedition  against  Canada  took 
place,  the  people  of  Boston  were  requested  to  supply  with 
provisions  the  British  fleet  which  sailed  into  that  harbor. 
The  Assembly  ordered  that  the  prices  of  provisions  and  other 
necessaries  of  the  service  should  stand  fixed  at  the  point 
where  they  stood  before  the  approach  of  the  fleet  was  known. 
"Sheriffs  and  constables,  jointly  with  Queen'g  officers,  were 
ordered  to  search  all  the  town  for  provisions  and  liquors  and, 
if  the  owners  refused  to  part  with  them  at  the  prescribed 
prices,  to  break  open  doors  and  seize  them."'  These  measures 
though  ordered  by  their  own  representatives  caused  a  great 
deal  of  discontent  among  the  colonists.  They  expected 
prices  to  rise  with  the  repeal  of  the  enactments,  and  the  com- 
pulsion to  sell  goods  at  low  fixed  rates  was  very  distasteful  to 
them. 

The  farmers,  both  i  revolutionary  France  at  the  time  of 
the  maximum  and  in  the  United  States  during  the  recent 
war  after  the  price  of  wheat  was  fixed,  showed  no  haste  to 
bring  their  produce  to  the  market. 

'^Parkman:    "A  Half  Century  of  Conflict,"  Boston  Transcript.  April  1,  1918, 


CHAPTER  n 

Movement  of  Prices  since  Outbreak  of  War 

Since  the  beginning  of  the  war  both  the  general  level  of 
wholesale  and  retail  prices  and  the  absolute  prices  of  specific 
commodities,  whether  necessities  or  luxuries,  have  risen 
steadily  and  to  great  heights. 

Wholesale  Prices 

The  extent  of  the  increase  in  the  average  wholesale  prices 
may  be  ascertained  from  index  numbers  published  regularly 
by  the  Statist,  the  London  Economist,  and  the  Board  of  Trade 
Labour  Gazette. 

The  average  wholesale  prices  of  commodities  as  gauged  by 
the  Statist's  index  number  of  the  prices  of  f  ty-five  articles 
were  the  same  in  1914  as  in  1913  or  1912.  During  these  three 
years  the  index  figure  stood  at  85,  or  15  per  cent  below  the 
Statist's  standard  period  (1867-1877- 100)  and  10  per  cent 
above  the  average  of  the  last  ten  years,  1904-1915-  While 
the  total  for  1914  does  not  show  any  enhancement  in  the 
general  level  of  prices,  considerable  fluctuation  took  place 
during  the  year  in  the  different  groups  of  commodities  which 
comprise  this  total.  Taking  articles  of  foods  and  materials 
separately,  one  finds  that  the  index  figure  for  food  rose  during 
the  year  from  77  to  81,  the  largest  increase,  from  69  to  75,  hav- 
ing taken  place  in  the  vegetable  food,  such  as  corn,  etc. ;  animal 
food  increased  in  price  much  less  than  it  did  either  in  1912 
or  1913,  rising  only  one  point,  from  99  to  100,  while  the  rise 
was  6  points  in  1912  and  3  points  in  1 913.  Sugar,  coffee  and 
tea  increased  from  54  to  58;  with  this  increase  the  index  figure 
remained  5  points  below  that  of  191 1  and  4  points  below  that 
of  1 91 2.  There  was  a  drop  in  the  price  of  materials  from  91 
to  88;  minerals  declined  from  liiin  i9i3to99in  1914;  textiles, 
from  84  in  1913,  to  81  in  1914  (the  index  figure  for  191 1  and 
1912  was  73);  sundry  materials  advanced  4  points  in  1914, 
from  83  to  87,  during  the  two  previous  years  the  figures  being 

ta 


GREAT  BRITAIN 


13 


81  and  82,  respectively.  The  fall  in  the  price  of  materials 
was  partially  due  to  the  fact  that  there  was  a  decline  in  their 
price  during  the  first  six  months;  this  decline  offset  the 
small  advance  in  the  latter  part  of  the  year.  The  index 
number  for  food  was  74.8  in  June,  1914.  as  compared  with 
75.7  in  Deceml«r.  I9i3.and  00.9  in  Decen-lwr.  1914;  the  index 
number  for  materials  was  83.7  in  June,  1914.  as  compared 
with  89.8  in  Decemf)er,  1913,  and  92.1  in  I)eceml)er,  1914.' 

The  combined  index  number  of  all  commodities  for  191 5 
was  27  per  cent  higher  than  for  1914  and  1913.  It  was  8 
per  cent  above  the  standard  period  1867-1877  and  32  per 
cent  above  the  average  of  the  years  1906-1915.  Food  rose 
from  74.8  in  June,  1914,  to  90.9  in  December  of  the  same 
year  and  to  11 1.4  in  December,  1915,  a  rise  of  49.0  per  cent 
in  the  18  months  of  the  war.  Materials  rose  from  25.7  in 
June,  1914,  to  92.1  in  December,  1914,  and  123.4  in  December, 
1915,  a  rise  of  44  per  cent.  The  greatest  increase  in  1915 
was  in  textiles,  which  advanced  43.6  per  cent.  In  comparison 
with  the  index  number  immediately  prior  to  the  war,  there 
was  an  advance  of  38.6  per  cent  in  textiles  at  the  end  of 
December,  1915. 

The  advance  in  minerals  was  36.3  per  cent  in  1915,  making 
a  total  advance  since  the  beginning  of  the  var  of  40.6  per 
cent.  The  advance  in  vegetable  food  was  29.1  per  cent, 
bringing  the  aggregate  advance  to  76.8  per  cent  since  June, 
1 914.  The  rise  in  animal  food  was  less  pronounced,  amount- 
ing to  22.8  per  cent  during  1915  and  to  31.4  per  cent  since  the 
outbreak  of  the  war.  In  the  group  of  sugar,  coffee  and  tea, 
the  rise  was  almost  entirely  confined  to  sugar,  which  rose  in 
1915  about  30  per  cent;  the  advance  for  the  group  was  10.8 
per  cent  for  the  year  and  34.7  per  cent  since  June,  1914. 
Sundry  materials  rose  26  8  per  cent  in  1915  and  50.2  per  cent 
since  the  war  beg^^n.  The  rise  was  particulariy  great  in  tim- 
ber, linseed  and  indigo.  In  the  aggregate  their  ad\ance  was 
22.5  per  cent  for  the  year  and  since  the  war  began  49  per  cent.* 

'  George  Paish:  "  Prices  of  Commodities  in  I9!4,"  Journal  of  the  Royal  Statistical 
^ofM'/y,  March,  1915,  pp.  281-283. 

^  Paish:     "Prices  of  Commodities  in  1915,"  Journal  of  the  Royal  Statistical 
Ji/cic/y,  March,  1916,  pp.  179-191. 


»4 


PRICES  AND   PRICE   CONTROL  DURING  THE   WAR 


In  1916  the  combined  index  number  was  136,  or  26  per  cent 
higher  than  in  1915,  and  60  per  cent  higher  than  in  1914, 
1913  and  1912.  It  was  36  per  cent  above  the  Statist's 
standard  period  1867- 1877  and  54  per  cent  above  the  aver- 
age of  the  years  1907-1916.  The  greatest  rise  in  average 
prices  in  1916,  as  in  1915,  was  in  textiles,  which  advanced 
during  the  year  39.4  per  cent.  This  advance  was  chiefly  due 
to  the  sharp  rise  in  the  price  of  cotton,  particularly  in  the 
latter  part  of  the  year.  Minerals  rose  during  the  same  period 
26  per  cent  and  sundry  materials  25.4  per  cent.  The  ad- 
vance in  the  average  prices  for  the  total  group  of  materials  in 
1916  was  29.3  per  cent,  as  compared  with  22.1  per  cent  for 
foodstuffs.  There  was  relatively  little  difference  between  the 
increase  in  the  price  of  vegetable  food,  animal  food,  and 
sugar,  coffee  and  tea;  they  rose  22.8  per  cent,  21.1  per  cent 
and  22.7  per  cent  respectively.  The  rise  in  the  average 
prices  over  191 3  was  69.3  for  foodstuffs  and  54.1  for  materials.' 

The  greatest  rise  in  average  prices  in  191 7  was  again  in 
textiles,  which  advanced  49  per  cent;  the  advance,  like  the 
one  of  39  per  cent  in  the  preceding  year,  was  largely  due  to 
the  continuance  of  the  substantial  rise  in  the  price  of  cotton. 
Vegetable  foods  and  sugar,  coffee,  and  tea  each  showed  a  rise 
in  price  of  31  per  cent  during  1917;  sundries  were  28  per  cent 
and  animal  food  was  26  per  cent  dearer.  In  minerals,  because 
of  greater  governmental  control  than  in  otherdepartments,  the 
rise  in  prices  for  191 7  over  those  for  1916  was  only  8  per  cent. 

In  comparing  the  average  prices  for  1917  with  those  of  the 
prewar  year  1913,  one  finds  that  vegetable  foods  have  shown 
the  most  marked  increase,  one  of  150  per  cent,  textiles,  second  in 
the  list,  having  risen  130  per  cent.  Minerals  increased  in  price 
less  than  any  other  group  of  commodities,  the  rise  having 
been  55  per  cent.  This  was  due  in  part  to  a  stricter  system 
of  control  of  minerals  introduced  by  the  government,  in  part 
to  the  fact  that  the  price  of  mineral  in  1913  was  high,  because  of 
a  coal  strike  in  the  spring  of  that  year.     The  price  of  animal 


'  Editor  of  the  Statist:    "Wholesale  Prices  of  Commodities  in  1916,' 
of  the  Royal  Statistical  Society,  March,  1917,  pp.  289-294. 


Journal 


GREAT  BRITAIN  15 

food  rose  between  1913  and  1917,  96  per  cent;  the  price  of 
sugar,  coffee  and  tea,  iii  per  cent,  and  that  of  sundry  materi- 
als, 109  f>er  cent.  Since  1913  the  percentage  rise  for  all  food- 
stuffs was  118,  for  ail  materials,  98,  and  the  total  increase  for 
all  groups  of  com-nodities*  105.' 

The  annual  figures  of  the  Statist  thus  indicate  that  prices 
rose  from  85  in  1913  and  1914,  to  108  in  1915.  to  136  in  1916 
and  to  174  in  1917:'  The  monthly  figures  show  an  even 
greater  increase  for  the  latter  part  of  191 7  and  the  beginning 
of  1918,  the  December  index  number  having  reached  185.  i. 
This  brought  the  average  wholesale  prices  close  to  the  highest 
level  that  has  been  ever  touched  by  them  since  we  have  had 
any  statistical  data  available  for  comparative  purposes. 
The  earlier  the  period  under  consideration,  the  less  reliable 
are  the  data,  but,  assuming  the  correctness  of  Professor 
Jevons's  figures,  the  average  for  1809  was  189  and  for  1810, 
171,  the  next  highest  level  having  been  reached  in  1818,  when 
the  index  number  was  159.' 

Since  1913  (the  prewar  year)  monthly  fluctuations  of  the 
index  numbers  of  the  45  commodities  included  in  the  Statist's 
list  were  as  follows: 

MONTHLY    FLUCTUATIONS    OF  THE  INDEX  NUMBERS*    OF    45 
COMMODITIES   1867-77- «oo* 

1913  I9'4  >9I5  «9>6  1917         «9«8 

January 86.4  83.5  964  "3  6  «59  3       186.2 

February 86.4  83.8  100.9  >27  o  164.0       187.3 

March 86.7  82.8  103.7  130.4  169.4 

April 86.2  82.3  1059  134.2  173.0 

\lay 85.7  82.3  107.2  135.4  •75° 

June 84.1  81.2  106.4  '3«  o  «8o.4 

July 84.2  82.4  106. J  130.5  1769 

August 85.0  87.9  107.0  134.5  1757 

September 85.7  893  I07  8  134-4  «76.4 

October 84.5  89.8  lio.o  141. 5  1806 

November 83.3  88.8  113. 1  1508  182.9 

December 83.8  916  118. 4  154.3  1851 

Year 85  85  108  136  174 

'The  twelve  monthly  figures  of  each  year  do  not  in  all  cases  exactly  (at  any 
rate  in  the  decimals)  agree  with  the  annual  averages,  as  the  latter  are  partly 
calculated  from  revised  figures. 

'  Editor  of  r/i«  5/a/w/;  "Wholesale  Prices  of  Commodities  in  1917,"  Journal 
of  the  Royal  Statistical  Society,  March,  1918,  pp.  334-338- 

'  The  Statist,  January  19,  1918,  p.  203. 

'  Journal  of  the  Royal  Statistical  Society,  March,  1917,  p.  291. 

•  Ibid.,  March,  191S,  p.  336. 


16 


PRICES  AND  PRICE  CONTROL  '"RING  THE  WAR 


WHOLESALE  PRICES  OF  COMMODITIES  FROM 


No.  of  Article*. . 


Month 


1914 

June  .  . 
uly... 
Aug. .  .  . 
Sept.. . 
Oct...  . 
Nov... 
Dec... 


JUNE,   1914,  TO  DECEMBER.   1917' 

Vege-     Animal 

Ubie     Food       Sugar, 

Food     (Meat     Coffee,  Fopd   "  fex- 

(Com,  and         and  ai>        tilet 

etc.)     Butter)    Tea 


66. s 

71  9 
81.9 
87.1 
86.7 
90.6 
93  a 


1915 


Jan ioa.3 

Feb 109.3 

Mar 105.6 

April 109.0 

May 1 10. 1 

June 103.0 

u>y 105  4 

Aug 105.6 

Sept loi .  I 

Oct 

Nov 

Dec 


110.3 

113  3 
117. 6 


1916 


Jan 125.7 

Feb 137.2 

Mar 133. 5 

April 133.2 

May 128.4 

iune 120.0 

uly 120.4 

Aug 1*9.4 

Sept I3J.6 

Oct 152.3 

Nov 164.0 

Dec 173.1 

1917 
Jan. . , 
Feb.. 
Mar. . 
April . 
May. 
June. 
July. 
Aug.. 
Sept.. 
Oct... 
Nov. 


179. I 

177.4 

187.1 

189.9 

186.9 

189.6 

174- I 

168.0 

162.5 

162.9 

161. 5 

Dec 160.8 


97  5 
lot. 5 
103.6 

101 .0 

100. 1 
98.4 

104  3 


107.0 
1 12. 1 

133  7 
135.0 

134  5 
137  5 
130.3 
131  8 

"9  3 

"3  4 

I30.4 
138.1 


137.8 

«37-S 
147.3 

153  I 
165.6 

i5»-4 
150.4 

154  7 
146.1 

154  1 
1566 
168.7 


175-8 
184.3 
187.6 
190.1 
197.5 

306.0 
201.6 

193  7 
187.7 
189.7 
191. 6 
196.7 


5«  8 
50.0 

67  7 
66  9 
65.0 
63  8 
63.0 

64.1 
66.4 
69  7 
7'  9 
73.0 

73-4 
72.9 

71  4 
71-5 
67.7 
68.5 
69.8 

73.8 
79.0 
84.8 
87.1 
89.3 
88.2 
86.3 
85.6 
86.0 
90.1 
91.6 
95  o 

96.6 
100.3 
104.8 

104.5 
105.8 
110.7 

107.9 
116.5 

130.5 

131.8 
133-5 
135-1 


74-8 
78.3 
86.9 
88.0 
87.0 
87.8 
90.9 

96.3 
01.3 
04.7 
07.1 
II. I 
05.8 
07.7 
08.1 
05.3 
06.3 
06.5 
11.4 


15  3 

30.8 

33 -7 
30.8 

33-9 
35  4 
34-3 
39  7 
18. 1 

39  9 
46.0 
55  o 

60.5 
63.7 
70.0 
72.0 
73-7 
79 .0 
70.3 
66.6 
63.0 
66.3 
66.5 
68.6 


96.7 

^4° 

96  1 
94  3 

97  6 
99  8 


«05-3 
109. 1 

"5. 7 
118. 6 
119.6 
126.6 

131.3 
119.6 
131.6 
133.9 
130.9 
136.0 


143.1 
149.2 

157-9 
159.5 
157  o 
153.3 
151  9 
154-8 
155-7 
157-6 
163.8 
158.9 

161. 6 
163.0 
165.8 
165.6 

171.4 
170.0 
169.9 
168.9 
167.3 
169.6 
174-5 
173  9 


80.6 
83  I 
83.0 
80.9 

83  5 
73.3 
77-8 


82.4 
86.5 

87.3 

88.4 

86.5 

90.6 

89.6 

92.6 

98.3 

100.3 

104.7 

111.7 


119.2 
116.9 
118.1 
119. o 
119. 8 
122.6 
133.8 
128.9 
130.9 
137  o 
151 .0 

150.4 

157  8 
167.7 
174-4 
173.7 
180.6 
200.1 
201.2 
198.7 
304.1 

313-4 
316.9 
316.5 


Sun- 
driei 


8a  5 
81.7 
86.4 
93.3 
96.8 
97  I 
97  7 


36 


A*ite- 

i.aU 


«5  7 
85  5 
88.6 
90.3 

9«  7 
89.6 
93.1 


lOI 

.1 

105.4  I 

106.3    1 

108.4    1 

107.5  1 

106.3    1 

107 . I    1 

107.7   I 

no. 3      1 

114-7      1 

119. 3     I 

133.9  I 

138.8     1 

131 

1     I 

133 

5     1 

135 

3      1 

135 

9    1 

133 

7     I 

1.33 

6    1 

133 

8     1 

134 

1     1 

137 

5     I 

150 

5    1 

153.9    1 

156.9     1 

163 

165 

179 

175 

175 

175 

179 

185 

188 

191 

9    l< 

197 

8     i< 

96 

00 

03 
05 
04 
06 

05 

06  3 
09.6 
13.7 
17  9 
33  4 


58.3 
64  3 
68.3 
73.8 
76  o 

81-5 

81.8 
83.4 

86.3 
91.1 
94  9 
97-1 


'  Journal  of  th$  Royal  Statistical  Society,  March,  1918,  p.  340. 


GREAT   BRITAIN  17 

The  two  following  tables  show  by  groups  of  commodities 
the  changes  which  have  occurred  during  the  past  five  years, 
the  first  table  giving  a  comparison  of  the  annual  index  num- 
bers, the  second  of  the  numbers  at  the  close  of  each  year. 

COMPARISON  OK  WAR  AND  PREWAR  ANNUAL  INDKX  NUMBERS' 

Increaie  '  i      Increaie  % 
No.  of  Annual  Index  Numbers  1916  on  1917  on 

Articles  1917  «9"6  I9«5  I9«4  I9«3     I9I5       19"3     «9i6     "9«3 

8        Veg.food 174    133     io«      75      69  +M.8  +9J.1  +31   +150 

7        Animal  food . .     19a    15a     ia6    100      99  +ai.i  +53  5  +'6     +96 
4        Sugar,     cofTee 

and  tea....     113      86      70      58      54  +aa.7  +61. a  +31   +111 
19        Foodstuffs 130    107      81      77  +a3.i  +69.3  +39  +113 

7  Minerals 17a     158     136      99    tii   +36.0+44.4     +8     +55 

8  Textiles 19a     139      93      81      84+394+53  9+49+130 

II        Sundries 174     It6     109      87      83  +35.4  +63.5  +38  +109 

36        Materials 179        i    108      88      91   +39.3  +54.1   +38     +98 

Total 136     108      85      85  +36.3  +59.9  +38  +105 

COMPARISON  OF  WAR  AND  PREWAR  MONTHLY  INDEX  NUMBERS* 

Increase  % 
Index  Numbers  Dec.,  1917  on 

1917     1916     1915     1914     I9>4       '916       1914 
No.  of  (Dec.  (Dec.  (Dec.  (Dec.   (June    (Dec.      (June 

Articles  30       30       30      30       30)        30         30) 

8        Veg.food 160.8  173. 1  117  6    93.3    66.5     -7.1   +141.6 

7        Animal  food 196.7  168.7  138. i  104.3    97.5  +16.6  +101 .7 

4        Sugar,  coffee  and  tea    135. 1     95  o    69.8    63.0    51.8  +4a.a  +161. 3 
19        Foodstuffs 168.6155.0111.4    90.9    74-8     +8.8+135.3 

7  Minerals 173915891360    99  8    96.7     +9  4     +79  9 

8  Textiles 316.5150.4111.7    77.8    80.6+439+168.5 

II        Sundries 197.8153.9133.9    97.7    835+393-1-1396 

36        Materials 197.1  153-8  133.4    9a. i     85.7  +38.1   +1398 

45        Total 185. 1  154.3  "8.4    91.6    81.3  +30.O  +138. 1 

The  index  numbers  of  the  Economist  tell  a  similar  story. 
The  general  level  of  prices  rose  from  1 16.6  at  the  end  of  July, 
1914,  to  149.1  for  the  same  date  in  1915,  to  191. i  in  1916, 
to  254.4  in  1 9' 7  and  to  265.7  on  the  last  day  of  December, 
1917.  The  advance  continued  through  1918  and  in  April 
the  index  number  reached  270.0.'  How  each  group  of  com- 
modities, according  to  the  Economist,  contriliuted  to  the  rise 
may  be  seen  from  the  two  tables  which  follow.  The  first 
table  gives  the  rise  in  points  for  yearly  periods,*  the  second 
indicates  the  monthly  fluctuations.' 

'  Journal  of  the  Royal  Statistical  Society,  March.  1917,  p.  ago;  and  March,  1918, 

p.  338. 

•  The  Slatist,  January  19,  191.S,  p.  103;  or  Journal  of  the  Royal  Statistical  Society, 
March,  1918,  p.  339. 

•  The  Economist  (London),  May  4,  1918,  p.  70a. 

*  Ibid.,  February  16,  1918,  p.  258. 

*  Ibid.,  May  4,  1918,  p.  703. 


iS 


IS 


PRICKS  AND  FBICB  CONTROL  DURINO  THE  WAR 


Cereals  and  meat 
Subsidiary  food. 

Textiles 

Minerals 

Miscellaneous  .  . 
Total  index  number 

•  Decline. 


Date 


Group 

total 

at  July 

31.  1914 


379 

616I 
464! 
535 
a.565 


From 

July  31. 

«9i4.  «o 
Dec.  31. 

1914 
Pomti 

•35 

6a 
•-107 

II 
133 
»35 


s 


u 

Basis  (average  1901-5} 500 

Jan   I.  1914  563 

April  I,  1914 560 

i"'y{«9i4  565I 

End  July,    1914 579 

;.   Aug.     ;;   641 

Sept.  646 

"    Oct.       "    656I 

Nov.      "    683 

"     ^       "    714 

Mar.,  1915 840 

"    June      ■'    818 

"    Sept.      "    809I 

"     Dec.       "    897 

'.'.    J'"-.  >9«6  949} 

June  989 

'     Sept.      •'    i,oi8 

;;     pec-  "  i.a94 

Jan.,  1917 1,310 

Feb.  "  I,3i2j 

"     Mar  "  1,346 

"     Anril  "  1,36a 

May  i,376j 

;;     June  ;;  1,432! 

„  J"'y        1.333J 

„      Aug.  1,342 

Sept.  i.aaij 

"      Oct.  "      I,226J 

Nov.      "     1,236) 

'     Dec.       "     i,286i 

;|     Jan.,    1918 I.aaij 

Feb.       "     1,235 

"     Mar.      "     1,238 

"     April      "    1,244 


Rise 

From 
Dec.  31, 
1914.  to 
Dec.  31. 

J?" 
Points 

i»t 

31) 
ait 

235i 
i6a 

834 


h 


during  Periods 

From 

From 

From 

Dec.  31, 

Dec.  31. 

July  31. 

1915.  to 

1916, to 

>9>4. to 

Dec.  31. 

Dec.  31, 

Dec.  31. 

I<il6 

1917 

«9I7 

Ponts 

Points 

Points 

397 

•-7» 

707* 

107 
393i 

133 
560 

,'M 

lia 

15 

375 

a63» 

a36» 

795  i 

I.a73 

937 

3,a8o 

I 


r 

1 

300 

500 

355 

64a 

3.5oJ 

6a6) 

,345 

616 

3.5a 

616) 

.369 

6a6 

405 

6III 

400 

560 

407 

51a 

414 

509 

4*7 

597 

4a8 

601 

470J 

667 

446 

731, 

503 

796J 

5ao 

794 

.5.36J 

937 

563 

«.i24i 

.561 

1. 137 

5«i 
610 

1. 189 

i,aa6 

64a 

i.a40 

648 

i.a6ii 

6.5aJ 

«.44« 

607 

i,5i» 

670 

1.504  ! 

726 

'.509 

724 

1.575 

679 

1.660 

686 

1.684 

686 

i.7«9 

693 

1.7.33 

697 

1.777 

744J  1.760 


858  J  1.073 
8a4  i,iia 
8a5   I,ii9| 

829  I. 159} 
834}  1.283 
84a   i,a9,') 
839»i,a86} 
84iii,a78i 
840   i,a96i 

830  1,311) 
822J  i,354» 
824   1,3s  I 
848   1,344 

839  J  1.348! 
829   1,329 
838    1,319 
836   1,319 
850   i,342i 


GREAT   BRITAIN 


■9 


1915  I  1916 

rut  eeowqwuT  -  ispex  ni^wfctw 


1917 


:^ ^.i  -|  ■ 


lie  rf^^  >'  ,— 


•.00 


? 


J  §  I 


Ills 


Jf  I,"  3  U  Jtn  I.I4IS 
Ouy,  1914 -100 


M   I  I   g 


leo 


TAtf  £fofioMti(,  February  i6,  1918,  p.  259 

The  two  preceding  tab'f's  and  the  chart  show  that  the  price 
of  cereals  and  meat  rose  steadily  until  December  31,  191 6,  the 
increase  having  been  particularly  pronounced  during  the  lat- 
ter year.  The  prices  fell  sharply  in  the  late  summer  of  191 7  on 
the  institution  of  the  nine  penny  loaf  and  controlled  beef  and 
mutton  quotations.     But  even  this  group  was  creeping  up 


.1 


ao 


roiCM  AND  Mlrg  CONTtOL  DUBINO  THE  WAR 


again  before  the  end  of  the  year.    Until  the  beginning  of  1916 
.  .T  *"  ■  «>»n|Mratively  .low  advance  in  the  price  of  sub- 
•Id     /  foodstuffs ;  since  then,  however,  a  more  rapid  rise  took 
. .    The  price  of  textile  materials,  particularly  of  cotton, 
oeclined  during  the  first  few  months  of  the  war.  but  a  reaction 
towards  higher  prices  set  in  in  1915  and  continuetl  through 
1916  and  191 7.  the  rise  having  been  particularly  rapid  during 
the  latter  year.    This  placed  textiles  at  the  head  of  the  Econ- 
omtsts  list,  while  they  occupy  the  second  place  according  to 
the  calculations  of  the  Statist;  however,  the  Statist's  figure, 
for  December,  191 7,  show  for  textiles  also  the  greatest  ad- 
vance over  the  price,  on  June  30. 1914.    The  price  of  mineral, 
was  hardly  affected  during  the  eariy  stages  of  the  war,  the 
greatest  increase  occurring  in  1915  and  1916,  when  the  price 
«»e  347*  points,  a.  compared  with  only  15  points  for  1917, 
The  miscellaneous  group,  which  includes  leather,  rubber,  oils 
.howed  a  sharp  rise  upon  the  declaration  of  war  and  with 
the  exception  of  slight  declines  in  the  summer,  of  1915  and 
1917.  the  increase  in  price  for  this  group  has  been  continuous 
In  percentages,  the  least  increase  appeared  in  metals,  which 
rose  82.5   per  cent,  and  the  greatest  increase  in  textile, 
which  rose  169.3  per  cent.    The  cereal  and  meat  group  went 
up  1 13.8  per  cent  and  other  foodstuffs  92.9  per  cent ' 

The  index  numbers  of  the  Board  of  Trade  are  based  upon 
the  price  movements  of  forty-seven  principal  articles,  weighted 
in  accordance  with  their  estimated  consuuip  -.  ,1  in  1681-2890 
The  results  of  the  Board  of  Trade  calculations  for  the  past 
five  years  were  as  follows: 

'  Ubour  Gatette  (Canadian),  January,  1918,  p.  46. 


CRIAT   BRITAIN  ff 

THE  BOARD  OF  TRADE  (UNITED  KINUIK)M)  INDEX  NUMBERS  OF 
WHOLESALE   PRICES  OF  47  ARTICLES ' 
(BAtK  YiAR  1900*100) 

Fooil,  An 

CmI         Tcsiiln        Drink  Ariiclr. 

Year                            jnd            (Raw            and  Miirrl.  Com- 

Metala      Maleriati)    Toliarro  lanrout  hine<| 

'9'-<,,                ,.■               <>»  5             US  O           1177  1(19  4  llh  5 

1^14  (January-luly)              N«  a            i«  i          ,,48  uK,  »  1116 

I9>4  (Auguit-Dccember).     HH  8            1168          iv>  4  iiij!  u'l  6 

1914  (Vear) 867            iiH  8          lio  9  m^  117  a 

'9'» «"  7            "9H          i.M  I  I4.\  »  r4,i  9 

•9'* «*5  ■           ISO  I          1N9  4  »o4  4  |H6  3 

'917 18J.0            »7o  I          i46  I  1560  J4J  9 

The  miKclUncoua  |rroup  compritM  tucb  artklrt  at  petroleum,  paraffin  was,  cot- 
ton teed,  wood  and  timber. 

In  the  coal  and  metals  group  the  greatest  rise  occurred  in 
1916,  when  there  was  an  increase  of  4^  per  cent  over  the  figure 
for  1915.  In  1917  the  index  number  was  10  per  cent  higher 
than  in  1916.    Zinc  and  lead  show  decreases  compared  with 

1916,  while  the  other  items  in  the  group  increased  in  price. 
The  figures  for  textiles  (raw  materials)  show  an  average 

rise  of  about  50  per  cent  in  1916  over  1915  and  of  50  percent 
again  in  1917  over  1916.  This  was  due  principally  to  ad- 
vances  in  the  price  of  raw  cotton  and  flax,  which  increased 
74  per  cent  and  71  per  cent,  respectively,  in  1916  and  in 

191 7.  The  index  number  for  the  group  relating  to  food, 
drink  and  tobacco  increased  by  nearly  30  per  cent  over  the 
number  for  1916,  each  of  the  items  in  the  group,  except  cocoa 
and  hops,  contributing  to  the  increase. 

In  the  group  of  mi-ic'-llaneous  items,  petroleum  shows  a 
decrease  of  6  per  cent  and  rubl)er  an  increase  of  less  than  one- 
half  of  I  per  cent.  The  other  items  show  large  increases, 
ranging  from  22  per  cent  to  45  per  cent,  the  figures  for  the 
whole  of  the  group  representing  an  increase  of  25  per  cent  over 
those  for  the  previous  year. 

Comparing  the  figures  for  191 7  with  those  for  1913,  it  will 
be  seen  that  there  was  a  rise  of  97  percent  in  the  index  num- 
ber of  the  coal  and  metals  group,  of  100  per  cent  in  textile 
raw  materials,  of  109  per  cent  in  the  food,  drink  and  tobacco 

'  Labour  Gatette  (British),  January,  1918,  pp.  6-7. 


f 


=  :)'. 


99 


PRICES   AND   PRICE   CONTROL  DURING  THE  WAR 


group  and  of  134  per  cent  in  the  group  of  miscellaneous 
materials,  the  general  index  number  showing  a  rise  of  108.5 
per  cent.' 

The  yearly  average  wholesale  prices  of  commodities  con- 
sidered in  the  Statist's  groups  fluctuated  since  1913  (the  pre- 
war year)  as  follows:' 

1913 


Wheat: 


Flour: 


Barley: 


Vegetable  Food: 

(  English  Gazette,  s.  and  d. 

j   .Pef.V ••    31.9 

lAmerican.s.andd.perqr. .  .   36.5 
Town    made,    white    (now 
"G.R.")  s.  per  sack  (280 

.     lbs.) 3oi 

/  English  Gazette,  s.  and  d. 

I  .   perqr 27.3 

Oats:  English  Gazette,  s.  and  d.  per  qr.   19 .  i 
Mai^e:  American  mixed,  s.  per  qr. .  .  .   23I 
Potatoes:*  Good  English,  s.  per  ton .  .   78 
Rirc-  /  Rangoon  cargoes  to  arrive,  s. 

1      and  d.  per  cwt 8.2 

Animal  Food: 

Beef  b  /  Prime,  d-  Per  8  lbs 54 

"^'    \  Middling,  d.  per  8  lbs 49 

Mutton-  /  Prime,  d.  per  8  lbs 62 

Mutton.  I  Mijj,i„g  J  per  8  lbs. .  .  .   56 

Pnrir-    /  Large  and  small,  average,  d. 

*^°'^''-    \     per  8  lbs ....  55 

Bacon:  VVaterford,  s.  per  cwt 77 

Butter-  /  Priesland,  fine  to  finest,  s. 

■  \      per  cwt 119 

Sugar,  Coffee  and  Tea: 

[■  British  West  India  refining,  s. 

per  cwt 9J 

Beet,  German,  88  p.  c,  f .  o.  b., 

s.  per  cwt 9} 

Java,  floating  cargoes,  s.  per 
cwt 10} 

1913 


1914 


35  o 
40.1 


33  i 

27.2 
21 .0 
29J 
71I 


1915 


53  II 
59  10 


49 

37  4 
30  9 
41 J 
93  i 


1916 


58 
67 


51-7 
33  5 
52I 
153J 


Sugar: 


Sugar,  Coffee  and  Tea  (Cent.): 

I  Ceylon  plantation,  low-  mid- 
Coffee:    j       dling,''  s.  per  cwt 81 

[  Rio,  good,  s.  per  cwt 53 

Congou,  common,  d.  per  lb. .  .     5 
•j-.j.       Indian  good  medium,  d.perlb.  8t 
Average  import  price,  d.  and 
dec.  per  lb 9.06 


56i 
52i 
64 
57J 

49 
75i 


iii 

I2| 

I3f 
1914 


79 
45 
6 
8| 


72J 
67i 
75* 
69! 

72 
93i 

141 


I4l 
•I7i 

1915 

78i 
10} 


8ii 
76} 
93i 
86i 

871 
I09i 

191 


24i 

•22  i 

26* 
1916 


77  J 
50 

8 
loi 


1917 


75  9 
85  3 


5»J  58J 


64.10 

51,7 

l86i 


9.1         133         16  10      25.3 


I04i 

lOI 

182 
199 

212 
191 

173 


31J 

•25i 

32} 
I9I7 


94f 

58 
l6i 


9  19        II  01       11.29     •14-68 


•  The  annual  prices  are  the  average  monthly  or  weekly  quotations,  except 
potatoes,  which  are  the  average  weekly  quDUtions  during  the  eight  months  Jan- 
uary to  April  and  September  to  December. 

<>  Meat  (9-13),  by  the  carcass,  in  the  London  Central  Meat  Market. 

"  Comparative  values. 

■'  East  India  good  middling  from  1908. 

•  Approximate. 

'  Labour  Gazette  (British),  January,  1918,  p.  6. 

»  Journal  of  the  Royal  Statistical  Society,  March,  1918,  pp.  344-349. 


GREAT   BRITAIN 


Minerals: 

I  Scottish  pig,  s.  and  d.  per  ton . 
Cleveland      (Middlesbrough) 
pig,  8.  and  d.  per  ton 
Bars,  common, £  per  ton 

f  Chili  bars,  i)  per  ton 

Copper:  i  English  tough  cake,  £  per 

I      ton 

Tin:  Stir    r.,  £  per  ton 

Len-.  i"n^-i;  h  pig,  f  ner  ton 

I^  VVallsend  Me'.t  i  in  London, 

I       s.  |x;r  -on 

Cr  I :  Xewcast  li  sti-  -m,  s.  per  ton .  . 
I  Average  expc  t  prices,  s.  and 
V      dfc.  jier  tea 


65.6 

58.3 
71 
68 

73  J 
30 1 

I9i 

21J 
I5i 


Textiles. 
Cotton: 


Middling  American,  d.  per 

lb r. 

Fair  Dhollerah,  d.  per  lb. .  .  . 

f  Petrograd,  £  per  ton 

Flax:  <  Russian,  average  import  price, 
[      £  per  ton 

Hemp:  (  ^'f  "^  f^'''  foP'"?;  ^  Per  »" 
\  retrograd  clean,  £  per  ton ,  . 

Jute:  Good  medium,  £  per  ton 


7  01 

511 
34 

4«i 
31J 

38 

26i 

•913 


Wool: 


Hides: 


Leather: 


Textiles  (Cont.): 

Merino  Port  Philip  average 

fleece,  d.' per  lb 18 

Merino     Adelaide,     average 

grease,  d.  per  lb 9J 

English,   Lincoln  half  hogs, 

{     d.  per  lb ijf 

Silk :  Tsatlee,  s.  per  lb 1 1 

Sundry  Materials: 

River  Plate  dry,  d.  per  lb. .  .    12  J 
River  Plate  salted,  d.  per  lb.  9} 
Average    import    price,    d. 

and  dec.  per  lb 8 .  62 

Dressing  hides,  d.  per  lb. .  .    19J 
Average  import   price,  d. 

per  lb i9j 

Tallow:  Town,  s.  per  cwt 34J 

ni    /  Pf.'"i- ^  per  ton  35J 

Oil:  \  Olive,  £  per  ton 49 J 

I  Linseed,  £  per  ton 24S 

Seeds:  Linseed,  s.  per  qr 45} 

Petroleum:'  Refined,  d.  per  gall 8} 

Soda:  Crystals,  s.  per  ton 47} 

Nitrate  of  Soda:  s.  per  cwt 1 1 J 

Indieo'  /  ^^"8^'  good  consuming,  s. 

I-    per  lb 2\ 

I  Hewn,     average     import 

I      price,  s.  per  load 40 

Timber:    |  Sawn  or  split,  average  im- 

\     port  price,  s.  per  load ...   63 
'  Approximate. 

'  Port  Philip  fleece  washed  nominal  since 
value  of  clean  wool. 
«  Petroleum  as  compared  with  the  average 


57  I 
51  o 

64I 
151 
I9l 

i4i 


71.2 


90.0 


6.41 

41*. 

33 


1914 
l8i 

9i 
"I 

loi 

9i 

9. II 
2ii 

19J 
3ii 

37J 
5oi 
24i 
48i 
71*. 
4-J 
loi 

55 

41J 

64} 


587 

4i 

59l 


9.00 

7 

76} 


■915 
loi 

iri 

13 
II 

10.04 

28f 

21! 

361 

34tJ 

51* 

3o| 

571 

48t 

13I 

58i 
94} 


1916 


32} 
«6S 

20 

16} 

.4i 
I3i 

11.70 

28  i 

46  J 

44  i 

59l 

4li 

80} 

12 

78} 

I7i 

I3i 

82i 

148} 


23 


95  7 


65  2 

loj 

72 1 

84.0 

115} 

89.7 
124} 

82} 
164 
24 

'34 

182 

32  J 

I36i 
238 
32 1 

303 

2ll 

•27J 
41 

•27  J 
30 

'3  94       1365       1696      24.64      27.16 


'6.55 

13I 

i'3i 


38  66i  85J  M51I 

26J  4fi  54 J  84I 

43  60J  71  |o5| 

^7i  21  i  3'  .191 


'917 

46} 

23I 

2oi 
21} 

20 
16 

'5  52 
35 

34i 

62  i 

46 

"5} 

56J 

II2i 

I6i 

89! 

25 

10} 

971 


1895,  exactly  in  proportion  with  the 
from  1873-77  only. 


H 


PRICES  AND  PRICE  CONTROL  DURING  THE   WAR 


Retail  Prices 
Food 

The  records  of  retail  prices  of  food  paid  through  the  United 
Kingdom  in  cooperative  stores  and  other  shops  largely  patron- 
ized by  the  working  people  are  collected  by  the  Board  of 
Trade  and  summarized  month  by  month  in  the  Labour  Gazette. 
It  is  to  be  regretted  that  no  complete  detailed  data  are  given 
regarding  actual  retail  prices  of  various  commodities,  the 
monthly  tables  presenting  but  average  percentage  increase 
since  July,  1914,  and  the  text  commenting  on  price  fluctua- 
tions of  selected  articles.* 

Retail  prices  of  food  began  to  move  upward  on  August  i, 
1914,  and  by  August  8  they  rose  as  much  as  15  or  16  per  cent 
above  the  "normal  prices  in  July."*  After  that  there  was  a 
fall  in  the  price  of  most  articles,  so  that  at  the  beginning  of 
September  the  average  increase  was  approximately  10  per 
cent,  but  by  December,  1914,  the  increase  reached  again  16 
per  cent.  To  some  extent,  the  advance  was  due  to  sea- 
sonal changes,  as  such  articles  as  eggs  and  butter  always  be- 
come dearer  towards  winter.  The  greater  part  of  the  rise, 
however,  must  be  attributed  to  other  causes.  The  average 
percentage  increase  at  the  end  of  the  year  19 15  was  45  above 
the  prices  prevailing  immediately  before  the  war.  The  great- 
est rise  took  place  in  the  latter  part  of  1916,  making  the  price 
level  towards  the  end  of  that  year  about  87  per  cent  higher 
than  it  was  in  July,  1914.  Prices  continued  to  advance  until 
July,  1917,  when  the  recorded  increase  was  104  per  cent; 
since  then,  with  the  exception  of  a  decline  in  September, 
there  has  been  very  little  change.  The  decline  was  caused  by 
the  fixing  of  maximum  prices  for  certain  staple  foods  and, 
as  can  be  seen  from  the  following  figures,  was  of  very  short 

'  The  Board  of  Trade  figures  are  based  upon  between  500  and  600  returns  of 
predominant  prices,  relating  to  prices  in  a  number  of  shops  in  every  town  in  the 
kingdom  with  over  50,000  population,  in  about  200  towns  with  populations  from 
10,000  to  50,000  and  in  about  250  smaller  places.  The  articles  included  are  beef 
and  mutton  (British  and  imported),  bacon,  fish,  flour,  bread,  tea,  sugar,  milk, 
butter,  rSeese,  margarine,  eggs  and  potatoes. 

•  Labour  Gazette,  January,  1915,  p.  6. 


GREAT   BRITAIN  «J 

duration.     The  average  percentage  increase  in  retail  prices 

of  the  principal  articles  of  food  from  month  to  month  since 

the  beginning  of  the  war  was  as  follows:' 

Month  (beginning  of)  1914  1915  igig  ,5,7 

l^l'^'y 18  45  «7 

Ff'"'"fO' 23  47  89 

^^'.'i^ 24  48  2 

Apnl 24  49  94 

J""« 32  59  102 

J"'y- 32J        61  104 

A"g'"'t   15  34  60  102 

September 10  35  65  106 

2=t°*»r- 12  40  68  97 

November ,3  4,  ^g  ,^6 

December 16  44  84  105 

Taking  up  the  various  commodities  included  in  the  Board 
of  Trade  averages,  one  finds  that  the  prices  of  British  meat 
have  not  shown  much  increase  during  the  latter  part  of  1914, 
but  imported  meat  has  become  much  dearer  than  before  the 
war.  Percentage  increase  since  July,  1914,  was  on  January  i, 
1915,  for  chilled  or  frozen  beef  ribs,  18,  thin  flank,  32  (these 
are  increases  which  took  place  in  large  towns).  The  prices  of 
British  meat  advanced  steadily  in  the  early  months  of  1915; 
at  the  beginning  of  May  they  reached  an  increase  of  about  20 
7er  cent  above  those  which  prevailed  in  July,  1914.  During 
May  there  was  an  advance  of  about  14  per  cent,  and  an 
--'  Htional  rise  of  6  per  cent  took  place  in  June.  The  fluctua- 
were  not  very  great  during  the  second  half  of  the  year. 
)urse  of  prices  of  imported  meat  was  somewhat  similar, 
uut  the  proportionate  increase  was  10  to  15  per  cent  greater. 
The  year  1916  opened  with  butchers'  meat  averaging  retail 
about  3d.  per  pound  above  the  level  of  prices  in  July,  1914, 
and  during  the  first  three  months  of  the  year  there  was  a 
steady  upward  movement  in  prices. 

During  April  and  May  there  occurred  a  very  marked  general 
rise;  the  average  increase  in  price  was  al      c  15  per  cent, 

rying  from  i  Jd.  per  pound  for  the  cheapest  cuts  of  imported 
iueat  to  nearly  2d.  per  pound  hr  ribs  of  British  beef.    From 

'  L''bour  Gaaette,  December,  1917,  p.  4   i;  also  The  Economist,  February  16, 
1918,  p.  258.  '  >  J      > 


J' 


36 


PRICES  AND   PRICE   CONTROL  DURING  THE   WAR 


I'p 

'I' 


June  I  to  December  i,  1916,  there  was  very  little  movement 
in  meat  prices;  they  averaged  about  sJd.  f>er  pound  above 
those  of  July,  1914.    Farther  advances  of  2  to  3  per  cent  took 
place  during  December  and  on  January  i,  191 7,  average  per- 
centage increase  since  July,  1914,  was  from  64  for  British  beef 
ribs  to  loi  for  imported  thin  flank.    Prices  of  British  meat  in- 
creased by  about  35d.  per  pound  between  the  beginning  and  the 
summer  of  1917;  in  July  of  that  year  advances  in  price  ranged 
from  100  to  over  190  per  cent  in  comparison  with  July,  1914, 
which  was  equivalent  to  average  increases  of  7jd.  to  lojd.  per 
pound,  according  to  cut.   As  may  be  noted,  in  1915,  1916  and 
in  191 7  up  to  September,  prices  showed  a  continuous  rise  dur- 
ing the  first  half  of  the  year,  followed  by  comparatively  little 
change  during  the  second  half.    In  1917  the  action  of  the  Food 
Controller  resulted  in  a  substantial  decrease  in  the  price  of 
British  beel  and  mutton  after  September  i.    It  declined  to  the 
extent  of  about  2id.  f)er  pound,  so  that  prices  at  December 
I,  191 7,  were  7d.  per  pound  above  the  level  of  July,  1914. 
With  imported  meat,  the  increase  during  the  summer  and 
the  subsequent  decrease  since  September  were  less  than  with 
British  meat,  the  decrease  amounting  to  about  Jd.  per  pound. 
The  price  of  bacon  was  on  August  8  about  15  to  20  per  cent 
above  that  of  the  previous  month;  after  this  rise  it  showed  an 
almost  continuous  decline  until  the  end  of  November,  1915; 
between  then  and  January  i  the  price  recovered  so  that  at 
January  i,  1916,  the  percentage  increase  was  about  31.    Bacon 
rose  in  price  very  little — less  than  id.  per  pound,  or  about  5 
per  cent,  during  the  first  seven  months  of  1916.     In  August, 
however,  there  was  a  5  per  cent  increase,  the  advance  contin- 
uing so  that  prices  at  the  end  of  1916  were  56  per  cent  higher 
than  in  June,  1914.     The  advance  was  very  pronounced  in 
1917,  being  especially  accelerated  during  August-October,  so 
that,  while  the  increase  from  April,   1915,   to  July,   1917, 
averaged  about  Jd.  a  pound  per  month,  in  the  three  above 
mentioned  months  in  191 7  it  averaged  i  Jd.  per  month.     The 
total  increase  during  1917  was  about  9d.  per  pound  and  on 
January  i,  1918,  th>.  percentage  level  was  139  above  July,  1914. 


GREAT   BRITAIN 


There  were  considerable  fluctuations  in  the  price  oifish;  on 
January  i,  1915,  the  prices  showed  an  increase  since  July,  1914, 
of  51  per  cent  for  large  towns,  and  of  3 1  per  cent  for  small  towns 
and  villages.  The  prices  rose  steadily  throughout  the  year. 
At  January  i,  the  increase  over  July,  1914,  reached  97  per 
cent.  It  went  up  to  105  pier  cent  at  the  beginning  of  February. 
Then  a  decline  set  in  and  in  July,  1916,  fish  sold  at  about  80 
per  cent  above  the  level  of  two  y«'ars  earlier,  being  the  lowest 
point  reached  during  the  year.  A  subsequent  rise  brought 
the  price  up  to  97  per  cent  over  the  July  prewar  level.  The 
movements  in  the  price  of  fish  were  irreguiar  through  1917, 
but  the  tendency  was  always  upwards,  and  since  August 
successive  advances  brought  the  nrices  to  nearly  treble  of 
what  they  were  in  July,  1914. 

There  was  a  sharp  rise  in  the  price  oi  flour  in  1914,  the  ad- 
vance having  amounted  to  about  20  per  cent  by  the  end  of 
the  first  week  in  August.  As  in  the  case  of  sugar,  prices  fell 
after  the  panic  ceased  and  then  rose  again,  so  that  at  January 
I  they  reached  once  more  the  20  per  cent  increase  over  the 
level  in  July.  Bread  increased  only  half  as  much  as  flour  at 
the  beginning  of  August  (11  per  cent),  the  advance  by  the  end 
of  the  month  being  8  per  cent.  As  with  flour  no  important 
changes  took  place  then  L-<til  November,  but  'uring  Novem- 
ber and  December  there  was  a  rise  amounting  to  5  to  6  per 
cent,  so  that  at  January  i,  1915,  bread  was  about  16  per  cent 
higher  than  in  July,  1914.  The  prices  of  both  flour  and  bread 
increased  sharply  during  January  and  February,  1915,  the 
increase  continuing,  though  less  rapidly,  up  to  a  maximum 
at  the  beginning  of  June,  when  flour  was  about  55  per  cent 
and  bread  45  per  cent  dearer  than  just  before  the  war.  Prices 
then  declined  until  November,  but  during  the  last  two  months 
of  the  year  upward  movements  were  resumed.  The  average 
price  of  bread  at  thebeginningof  1915  was6jd.  for4  pounds; on 
June  I  it  reached  8|d.  and  on  January  i  it  fell  to  8jd.,  as  com- 
pared with  5|d.  in  1914,  before  the  war.  In  the  first  eight 
months  of  1916  the  price  fluctuated  between  8jd.  and  gH  per 
4  pounds.    Subsequent  increases  brought  the  average  to  9^d. 


■A 

I 

1^ 


i 


98 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


at  November  I  and  lod.  at  December  i.  Expressed  in  per- 
centage form,  the  price  of  bread  at  the  end  of  1916  was  73 
per  cent  above  the  level  of  July,  1914;  at  the  end  of  1915  it 
was  about  42  per  cent  above  this  level.  The  retail  prices  of 
flour  advanced  proportionately  more  than  those  of  bread 
during  the  year,  viz.,  from  49  per  cent  at  January  i,  1916,  to 
88  per  cent  at  January  i,  1917,  above  the  prices  prevailing 
immediately  before  the  war.  The  average  price  of  bread  rose 
from  about  lod.  per  4  pounds  on  January  i,  1917,  to  iijd.  in 
May,  after  which  it  remained  almost  stationary  until  the 
introduction  of  the  subsidized  9d.  loaf  on  September  17. 
The  movements  in  the  price  of  bread  corresponded  to  those  of 
flour. 

The  14  per  cent  increase  in  the  price  of  tea  at  January  i, 
1915,  was  caused  by  the  increase  in  the  duty  (3d.  per  pound 
in  November,  1914).  From  January  to  September,  1915,  the 
aggregate  increase  was  nearly  3d.  per  pound  or  50  per  cent 
over  the  July,  1914,  level.  In  September  an  additional  duty 
of  4d.  per  pound  was  imposed  and  prices  advanced  by  an 
average  of  3|d.  per  pound,  so  that  by  the  end  of  the  year  tea 
was  48  per  cent  higher  than  before  the  outbreak  of  the  war. 
During  1916  movements  in  the  retail  price  of  tea  were  insig- 
nificant, and  191 7  found  tea  only  about  3  per  cent  higher  than 
it  was  at  the  beginning  of  1916;  this  represents  an  increase  of 
about  9d.  per  pound,  7d.  of  which  is  accounted  for  by  an  in- 
creased duty.  In  1917  there  was  a  continuous  rise  in  the  price 
of  tea,  which  advanced  from  2s.  4d.  per  pound  at  the  begin- 
ning of  the  year  to  3s.  2d.  at  the  beginning  of  December.  It 
declined  then  about  i\d.  per  pound,  and  at  January,  1918, 
the  price  was  98  per  cent  above  the  July,  1914,  level. 

Sugar  rose  on  August  8,  1914,  to  80  and  90  per  cent  above 
the  level  in  July.  It  fell  somewhat  and  then  rose  again,  at 
the  beginning  of  January,  19 15,  the  price  of  granulated  sugar 
being  two-thirds  higher  than  at  the  beginning  of  the  war. 
The  price  remained  unchanged,  usually  at  35d.  per  pound, 
from  January  to  September,  1915,  but  in  that  month  it  rose 
to  4d.  per  pound  in  most  parts  of  the  United  Kingdom. 


GREAT   BRITAIN 


»9 


Sugar  was  2d.  per  pound  just  before  the  war.  In  the  first  three 
months  of  1916,  the  price  rose  to4jd.  per  pound.  In  April  there 
was  an  increase  of  Jd.  per  pound  because  of  increased  duty. 
Since  that  time  small  monthly  increases  occurred  which  have 
in  the  aggregate  raised  the  ii/erage  price  to  sjd.  per  pound. 
Of  this,  I  id.  is  attributable  to  duty.  There  was  no  change 
in  price  up  to  the  beginning  of  May,  191 7.  An  increase  then 
took  place,  and  from  July  to  the  end  of  the  year  the  price  was 
6d.  per  pound. 

The  slight  advance  in  the  price  of  milk  during  the  latter 
part  of  1914  (it  was  6  per  cent  on  January  i,  1915)  was 
purely  seasonal.  There  were  few  changes  in  the  price  of  milk 
until  September,  1915.  At  the  beginning  of  this  month  the 
average  price  was  12  per  cent  above  that  of  July,  1914,  and 
at  the  beginning  of  January,  1916,  the  corresponding  figure 
was  29  per  cent,  which  represents  an  increase  from  3§d.  to  4^d. 
per  quart.  The  average  retail  price  of  milk  was  about  4|d. 
per  quart  during  the  first  four  months  of  1916  and  4|d.  from 
May  I  to  August.  In  September  an  upward  trend  in  prices 
set  in,  which  continued  throughout  the  rest  of  the  year  and 
brought  the  price  to  nearly  5^d.  per  quart  at  the  beginning 
of  1917.  This  represented  a  57  per  cent  increase  over  July, 
1 914,  prices.  Milk  averaged  sH-  per  quart  from  January  to 
September,  when  an  advance  began  which  raised  the  average 
price  to  7d.  at  the  beginning  of  1918,  about  double  the  level 
of  July,  1914. 

Butter,  after  a  marked  rise  in  August,  rapidly  fell  to  little 
above  normal;  an  increase  in  price  during  September,  October 
and  November  may  be  ascribed  to  season.  An  additional 
rise  of  5  per  cent  occurred  between  December  i  and  January 
I,  on  which  date  butter  was  about  14  per  cent  higher  than  in 
July,  1914.  During  the  first  part  of  1915,  barring  slight 
fluctuations,  butter  remained  steady  at  about  15  per  cent 
increase  over  July,  1914.  From  July,  1915,  to  October  it 
rose  very  substantially,  reaching  an  increase  of  34  per  cent  in 
the  latter  month.  In  1916,  the  prices  remained  fairly  steady 
at  this  level  from  January  until  August.     During  the  latter 


S? 


30 


PRICES   AND   PRICE   CONTROL  DURING  THE   WAR 


month  and  in  each  of  the  remaining  months  of  the  year  a 
substantial  increase  was  recorded,  so  that  at  the  end  of  the 
year  butter  was  about  30  per  cent  dearer  than  at  the  beginning 
and  70  per  cent  dearer  than  in  July,  1914.  The  steep  rise  was 
not  arrested  unti:  /larch,  1917,  when  it  was  nearly  80  per  cent 
(over  iid.  per  pound)  dearer  than  just  before  the  war.  The 
advance  continued,  and  by  the  beginning  of  October  prices 
were  approximately  double  those  of  July,  1914.  By  this 
time  the  prices  of  most  butters  were  under  control,  an  excep- 
tion being  afforded  by  Danish  products,  which,  free  from 
control  at  the  import  stage,  retailed  at  4s.  and  more  per  pound. 
By  the  end  of  the  year  Danish  butter  was  brought  into  line 
with  other  butter;  the  price  of  butter  has  been  reduced  to 
about  the  level  of  October  i,  1917,  viz.,  2s.  sd.  per  pound,  or 
about  double  the  July,  1914,  price. 

Cheese  was  not  affected  greatly  by  the  panic  in  the  early 
part  of  August,  1914.  During  the  period  September  to 
December  the  price  rose  5  per  cent  and  at  the  end  of  the  year 
it  reached  a  level  of  10  per  cent  above  that  in  July,  1914.  A 
steady  advance  continued  throughout  the  first  half  of  1915, 
the  total  increase  during  the  six  months  being  20  per  cent, 
or  2d.  per  pound.  The  price  fell  slightly  and  then  recovered 
again.  On  January  i,  1916,  the  increase  over  July,  1914, 
was  32  per  cent.  A  steady  upward  movement  in  the  price 
(3  to  4  per  cent  a  month)  characterized  the  cheese  situation 
in  1916;  the  only  exceptions  to  this  were  the  months  of  June 
and  July,  in  which  the  price  declined  7  per  cent,  and  Novem- 
ber, when  a  7  per  cent  rise  took  place.  At  the  end  of  1916 
the  prire  of  cheese  was  about  75  per  cent  above  the  level  just 
before  the  war.  Cheese  rose  by  4d.  per  pound  between  Jan- 
uary and  June,  1917,  at  which  time  its  average  price  was 
is.  7^d.  per  jKJund,  as  compared  with  8|d.  in  July,  1914.  At 
the  end  of  June,  191 7,  "government  cheese"  of  colonial  or 
American  origin  was  introduced  for  retail  sale  at  is.  4d.  per 
pound  and  British  cheese  came  under  control  soon  afterwards. 
The  result  was  that  cheese  sold  at  the  begmning  of  1918  at 
about  is.  4^d.  a  pound. 


GREAT   BRITAIN 


3* 


During  the  latter  part  of  1914  and  through  1915  the  price 
of  margarine  showed  very  little  change  over  prewar  figures, 
apart  from  a  rise  of  from  15  to  20  per  cent  and  a  subsequent 
fall  in  the  early  weeks  of  the  war.  During  1916  there  was  an 
increase  of  a  little  over  id.  per  pound,  and  between  January 
and  July,  191 7,  an  advance  of  3jd.  per  pound  occurred.  On 
December  i,  191 7,  the  price  averaged  about  Jd.  per  pound 
lower  than  in  July,  191 7,  and  4jd.  higher  than  just  lieforc  the 
war;  this  amounts  to  I  id.  or  is.  per  pound  for  the  ordinary  kind. 

After  a  sharp  rise  at  the  beginning  of  the  war,  tl'  prices 
of  e^gs  fell  again  to  a  level  only  about  12  per  cent  above  that 
ot  July.  Large  advances  took  place  from  September  to 
November,  and  on  January  l,  1915,  the  price  of  fresh  eggs 
showed  an  increase  of  63  per  cent  above  the  July  level,  a 
part  of  this  rise  being  due  to  the  time  of  the  year.  Variations 
in  1915  were  largely  seasonal,  but  prices  were  higher  than  dur- 
ing the  corresponding  periods  in  1914.  The  same  price  situa- 
tion continued  through  1916  and  191 7,  eggs  in  July,  1916, 
being  about  50 per  cent  higher  than  in  the  same  month  in  1914. 
At  the  beginning  of  December,  191 7,  they  were  twice  as  dear  as 
they  were  three  years  earlier,  the  price  having  risen  to  4d.  for  an 
egg,  as  compared  with  3jd.  on  January  i ,  191 7,  and  2d.  in  April. 

Potatoes  fluctuated  considerably  in  price  from  place  to  place. 
In  large  towns  prices  on  August  8, 1914,  averaged  about  15  per 
cent  above  those  of  July,  while  in  the  small  towns  and  vUagcs 
the  increase  was  only  4  per  cent.  Subsequently,  prices  fell 
continuously  until  the  end  of  October,  when  they  reached  a 
level  below  the  July  prices  by  16  percent  in  the  small  towns 
and  Aillages.  On  January  i,  1915,  they  were  below  the  July 
level  l)y  11  and  22  per  cent,  respectively.  In  1915  variations 
in  prices  were  largely  seasonal  and  did  not  show  much  in- 
crease over  the  prices  for  corresponding  periods  in  1914.  At 
the  end  of  the  year  the  decrease  for  large  towns  was  wiped 
out  and  the  prices  were  about  equal  to  those  of  July,  1914. 
The  price  of  potatoes  remained  comparatively  normal  until 
April,  1916.  In  that  month  there  was  a  rise  of  over  40  per 
cent  in  the  average  price  of  old  potatoes,  and  further  advances 


3*  PRICES  AND  PRICE  CONTROL  DLRINC  THE   WAR 

of  8  per  cent  in  May  and  31  per  cent  in  June  followed.  On 
July  I  the  average  price  of  old  potatoes  was  lod.  per  7  pounds, 
as  compared  with  4fd.  per  7  pounds  until  April.  Prices  of 
new  potatoes  on  August  i  were  gd.  per  7  pounds,  dropping 
to  7jd.  per  pound  at  the  beginning  of  September.  Prices 
remained  fairly  stationary  at  this  high  level  for  some  weeks 
and  then  a  rise  of  34  per  cent  took  place  in  October ;  additional 
increases  of  4  per  cent  for  the  following  two  months  resulted 
in  the  prices  at  the  end  of  the  year  averaging  lojd.  per  7 
pounds,  or  about  130  per  cent  higher  than  twelve  months 
earlier.  The  average  price  of  potatoes  ranged  from  lojd.  to 
II  jd.  per  7  pounds  in  the  first  half  of  191 7.  The  rise  has  been 
due  to  scarcity.  When  the  Food  Controller  established  a 
maximum  price  of  ijd.  per  pound  it  was  rapidly  adopted  in 
most  places.  The  plentiful  crop  of  191 7  resulted  in  the  price 
of  potatoes  falling  to  an  average  of  6fd.  per  7  pounds.' 

Taking  the  price  of  each  article  as  reported  in  July,  1914, 
as  a  base,  the  following  table  shows  the  per  cent  of  increase 
in  prices  of  certain  articles  since  July,  1914.* 

Luvc  Towni  (Population!         Small  Towni  and  VUls(c«  Unitnl 

Artid*  overso.ooo)  Kinfdom 

Jan.  I,  Jan.  i,  Jan.  i,  Jan.  i,  Jan.  i,  Jan.  i,  Jan.  i,  Jan.  I,  Jan.  i,  Jan.  i, 
■  gij       1916       IUI7       1918       '915       1916       1917       191S       1917       igis 

19  ■■'.      -itiih: 

■"■'■■:, «  37  66  78  6  34  61  »3  64  «I 

=  '.r"t',5''i"     •     "       "       w       ""       '       M       74        95       84      loi 

Bwf.  chillrd  or 
frozen: 

jy"   ■    ■, '8  51  90  110  15  43  81  113  85  116 

Flank,  thin 32  70  107  IS'  ai  57  96  laa  lut  137 

Mutton,  troxen: 

t««»  '2  *S  90  I4i  14  38  83  ij6  86  134 

Breaw 38  70  IJ7  109  ai  S6  117  134  122  161 

Bacon,  nreaky.  9  34  60  147  5  all  53  130  56  139 

FiJh.  .......  ....  SI  119  I5J  323  31  75  108  169  131  196 

Flour.  hoUKhold  18  46  84  50  33  sa  93  54  88  5a 

»»»»'• «•  4S  70  57  14  39  68  5a  73  54 

J«» ;■■■■  '*  49  51  98  13  48  50  99  51  9i 

Suiar,  granulated  69  97  173  194  65  89  167  185  17a  189 

Milk.. 6  30  59  103  7  as  54  96  57  99 

Ff"h "  3a          73  loa  16  36  74  105  73  103 

_Salt 10  30          70  106  14  33  71  105  71  105 

Chme. 10  32          74  91  10  32  75  91  75  91 

Margarin 5  8          35  7i  4  6  35  61  35  66 

S^f 63  to8         179  333  65  103  17:  23i  tii  343 

Potatoei ..  ..  'ii  138  SI  '33  TO  105  33  laa  37 

All  above  articles 
(weighted     per- 
centage increaie)  19  48          91  III  17  43  83  103  87  106 
'Decrease. 

'  The  data  for  the  discussion  o{  retail  prices  were  taken  from  the  Labour  Gaulle 
for  1915,  1916,  1917  and  January,  1918. 

•  Monthly  Review  of  Ike  U.  S.  Bureau  of  Labor  Slalistics,  March,  1916,  p.  83; 
Labour  Gazelle,  January,  1918,  p.  5. 


GRBAT   BRITAIN 


33 


With  reference  to  items  of  expenditure  othtT  than  food 
there  have  been  substantial  increases,  except  with  regard  to 
rents,  but  the  average  advance  has  not  t)een  so  great  as  in 
food.  The  increase  from  July,  1914,  to  January  i,  1918,  in 
the  cost  of  ail  the  items  ordinarily  entering  into  working  class 
family  expenditure,  including  food,  rent,  clothing,  fuel  and 
light,  etc.,  may  be  estimated  at  Iwtween  80  and  85  per  cent, 
taking  the  same  quantities  of  the  various  items  at  each  date 
and  eliminating  advances  arising  from  increased  taxation, 
and  between  85  and  90  per  cent,  if  increases  due  to  taxation 
are  included. 

The  average  perct.itage  of  increase  Iwtween  July  14,  1914, 
and  December,  1917,  in  retail  prices  of  a  number  of  groceries 
of  less  importance  in  the  working  class  dietaries  may  l)e  seen 
from  the  following  statement : 


Per  Cent 

Lentils,  iplit  (red) a^o 

Peat,  iplit  (yellow) 310 

Sago 190 

Tapioca 160 

Syrup 160 

Beam,  haricot 140 

Oatmeal,  Scotch 140 


Per  Cent 

Milk,  condenied lao 

Bean*,  buttrr.  .    no 

Jam    no 

Rice,  Rangoon 100 

Cocoa  (looie) 93 

Coffee 30 


The  average  rise  of  these  items  is  clearly  greater  than  with 
the  principal  foodstuffs.'  Excluding  coffee,  for  which  the  ad- 
vance has  l)een  exceptionally  small,  the  average  increase  is 
between  140  and  150  per  cent,  as  compared  with  105  per  cent, 
shown  as  the  average  for  the  principal  articles  of  food. 

Clothing 

With  regard  to  clothing,  the  statistical  data  available  are  not 
so  extensive  as  those  drawn  upon  for  food  prices,  but  the  fol- 
lowing table,  made  up  from  selected  cases  and  supplied  to  the 
committee  by  the  Department  of  Labour  Statistics  of  the 
Board  of  Trade  may  be  taken  as  broadly  representative  of 
the  upward  movement  in  the  prices  of  standard  articles  of 
clothing  and  boots: 

'  Labour  GauUt,  December,  19 17,  p.  438. 


34 


P«ICB8  AND   roiCE  CONTBOt  Df  IIMQ  THR   WAR 


1916 


AVERAGE  PERCENTA<.E  INCREASE  IN  THE  PRICES  OF  THE 
UNDERMENTIONED  CLOTHING  MATERIAIJB,  ARTICLES  OF 
CLOTHING  AND  BOOTS.  BETWEEN  JULY,  1914.  AND  SEPTEMBER. 
I9l6> 

Ankle  or  Material 

Woolen  material  (w  KurmFtiK        

Woolen  underrlothing  and  hoaiery 

Men't  tulta  and  overcoats 

Cotton  material  for  narmentt 

Cotton  underrlothing  and  hoaiery 

Boots  and  thoea: 

Men's  heavy 

Men's  light ■■■.■.■,'...'.'..,... 

Women's 

Children's 


Srplrmber  I , 

75% 

40% 
So'i) 
90% 


75% 
6o'| 

70% 


Coal 


Retail  prices  of  coal  vary  greatly  as  between  coal  prmluring 
areas  and  other  parts  of  the  country.  Thus,  while  in  Lan- 
cashire and  Yorkshire  increases  of  3s.  to  5s.  per  ton  are  noted 
as  between  July,  1914,  and  September.  1916.  in  the  south  of 
England  and  in  Ireland  prices  have  risen  as  much  as  143.  and 
15s.  per  ton.  The  following  table  gives  the  course  of  retail 
prices  in  1915-16,  the  average  price  in  July,  1914,  being  258. 
4d.  for  London  and  22s.  sd.  for  the  30  provincial  towns  in- 
cluded in  the  table:' 


AveraRe  Price  per  Ton  at 
the  Beginning  of  each 
Date  Month 

Provincial 
Towns 


London 
.       "915 

January 39s.  4d. 

March ,^48.  ^d. 

May 31S.  4d. 

July 3i».  6d. 

September 31B.  6d. 

Novt-mlier 33s.  4d. 

1916 

J?"'  r" y 3a»-  4d. 

March 338.  4d. 

May  33»-4d. 

I"'y      .     .Ws.4d. 

September 338.  4d. 


Average  Percentage  Increase  be> 
tween  July,  1917,  to  Beginning 
of  each  .Month 

Provincial 


aas.  Sd. 

36s.  9d. 

37s.  3d. 

378.  lod. 

37s.  lid. 
38s.  5d. 

38s.  I  id. 

39s.  3d. 

398.  4d. 

39s.  8d. 

398.  9d. 


London 
Per  Cent 
16 
.?6 
'4 
^4 
J4 
38 

38 

33 
3a 


Towns 

Per  Cent 

5 

19 

sa 

H 
»S 

a? 

a* 

30 
31 
3» 
33 


The  pit  head  price  of  coal  was  regulated  in  191 5  by  the 
Price  of  Coal  (Limitation)  Act,  which  imposed  penalties  for 

'  Interim  report  of  the  committee  appointed  by  the  Board  of  Trade  to  investi- 
gate the  cause  for  the  increase  of  prices  of  commodities,  Cd.  8358,  1916. 
•  Interim  report  of  the  commiUee  on  prices,  Cd.  7866,  pp.  6-7. 


GREAT   RRITAIN 


3S 


•sking  or  taking  a  price  i'xcfct!ing  l>y  more  than  a  standard 
•mount  (4s.  per  ton)  the  price  for  coal  of  the  name  ilosK-ription, 
•old  under  similar  nmditions,  in  the  period  July,  1913,  to 
June.  1914. 

Lowest  summer  prices  o^  coal  were  maintained  in  London 
from  June  16  to  Septemlx-r  25,  1914,  inclusive;  the  retail  price 
of  "iH'st  Derbyshire."  a  typical  coal  of  g«Mxl  quality,  during 
the  period  was  269.  per  ton.  The  rise  Ijetween  SeptemlxT  25 
and  February  17  was  9s.,  as  compan  d  with  a  rise  of  only  as. 
in  the  winters  of  lK>th  1912-13  and  1913-14.  The  price  of 
trolley  coal  (coal  sold  in  small  quantities  generally  to  working 
class  consumers)  rose  in  even  greater  degree.' 


'  Interim  report  of  the  committee  oir  price*,  Cd.  7866,  p.  7. 


CHAPTER  m 
Causes  of  the  Rise  in  Prices 

The  reasons  given  for  the  rise  in  prices  are  usually  prompted 
by  certain  aspects  of  the  sifation  which  are  forced  upon  the 
attention  of  each  individual  observer  by  his  own  personal 
experience  or  by  the  character  of  his  special  investigations. 
Those  occupied  with  monetary  transactions  view  the  subject 
from  a  different  angle  than  those  who  are  engaged  in  the  pro- 
duction and  distribution  of  commodities  or  those  who  are 
students  of  agricultural  economics. 

Prices  have  been  rising  all  over  the  world  for  over  two 
decades,  their  upward  trend  having  started  in  1895.  This 
phenomenon  attracted  the  attention  of  statesmen,  economists 
and  social  workers  and  much  has  been  written  on  the  subject 
in  an  attempt  to  explain  the  causes  of  the  rise  and  to  suggest 
remedies.  The  problem  has  become  particularly  acute  since 
the  outbreak  of  the  war.  While  prices  advanced  about  50 
per  cent  from  1895  to  1913,  their  advance  between  1912  and 
1917  was  over  90  per  cent.' 

Inflation 

Inflation  has  been  one  of  the  causes  most  frequently  as- 
signed for  the  war  rise  in  the  general  level  of  prices.  Speak- 
ing before  the  House  of  Lords  on  November  20,  191 7,  Lord 
Rhondda  made  the  statement  that  "the  principal  factor 
in  increasing  prices  was  the  expansion  of  currency  arising 
from  inflation  of  credit  and  the  issue  of  a  large  amount  of 
paper  money."'  A  couple  of  months  earlier  Mr.  Runciman 
expressed  the  view  that  the  main  cause  of  the  rise  in  prices 
was  the  impossibility  to  finance  the  war  without  a  degree 
of  inflation  altogether  unprecedented.'  Mr.  McKenna  ex- 
pressed about  the  same  time  a  similar  view.* 

'  Business  Digest,  1917,  p.  1491. 

•  The  Economist,  November  24,  191 7,  p.  837. 
'Liberal  Magazine,  August,  191 7,  p.  363. 

*  The  Economist,  July  a8,  1917,  p.  in. 

36 


1  !' 


I  ill 


GREAT   BRITAIN 


37 


These  expressions  of  opinion  are  in  keeping  with  what  has 
been  pointed  out  again  and  again  by  the  Economist,  the 
Statist,  the  Nation  and  other  British  periodicals.  The  chief 
cause  of  increased  prices,  writes  the  Nation,  has  been  the  im- 
mense borrowing  of  the  government,  borrowing  which  has 
not  been  confined  to  the  savings  of  the  people,  but  which 
stimulated  the  manufacture  of  paper  credit  by  bankers  and 
financiers.' 

The  Economist  believes  that  as  long  as  the  government  will 
continue  its  policy  of  creating  fresh  currency  in  all  its  forms  so 
long  will  prices  continue  to  rise  as  the  result  of  inflation.' 

The  greater  the  output  and  the  wider  the  distribution  of 
notes  and  certificates,  the  larger  the  demand  for  commodities 
of  which  the  supply  has  been  steadily  declining;  the  result  of 
it  has  been  and  necessarily  so  a  continuous  rise  in  prices.' 

The  currency  has  been  inflated  in  two  ways:  (i)  by  increase 
of  volume  and  (2)  by  rapidity  of  circulation,  the  latter  having 
been  brought  about  by  a  great  redistribution  of  wealth.  An 
abnormal  amount  of  money  has  been  thrown  constantly  into 
circulation  among  large  masses  of  the  population  who  spend 
it  from  week  to  week.* 

But  while  statesmen  have  been  pointing  to  inflation  as  a 
cause  for  the  rise  in  prices  and  while  they  have  been  either 
justifying  or  attacking  the  fiscal  policy  of  the  government, 
no  careful  investigation  has  been  made  as  to  the  extent  of  the 
disproportion  between  the  issue  of  currency  and  checks  and 
the  wants  of  the  British  trade.  Various  governmental  com- 
mittees, chambers  of  commerce  and  other  public  bodies 
confined  their  inquiries  to  the  study  of  price  fluctuations  of 
some  specific  commodity;  they  were  not  concerned  with  index 
numbers,  and,  when  giving  reasons  for  the  increase  in  the 
price  of  milk,  of  meat  or  of  coal,  they  do  not  mention  inflation 
at  all. 

'  The  Nation,  October  14,  1916. 

'  The  Economist,  June  9.  1917,  p.  1061 ;  September  I,  1917,  p.  316. 

*A.  Hurd:  "Wages,  Prices  and  Supplies— A  Vicious  Circle,"  The  Fortnightly 
Review,  lanuary,  1918,  p.  38. 

« A.  Shadwell:  "  Food  Prices  and  Food  Supply,"  The  Nineteenth  Century  and 
i4/>f,  April,  1917,  p.  741. 


1: 

38 


PRICES  AND   PRICE  CONTROL  DURING  THE   WAR 


Statistical  studies  that  have  been  made  so  far  by  British 
economists  seem  to  deal  with  but  one  side  of  the  question,  the 
circulation  media.  Sir  Inglis  Palgrave  asserts  that  Great 
Britain  is  clearly  suffering  from  an  excessive  issue  of  paper 
and  that  she  shows  all  the  symptoms  of  the  disease — inflated 
prices,  speculation  and  a  popular  and  fiscal  demand  for  still 
lai^er  issues  to  sustain  the  inflated  price.  However,  the  only 
definite  data  that  we  find  in  his  paper  are  statistics  showing 
the  value  of  notes  and  certificates  outstanding  from  the  time 
they  were  first  issued  when  the  war  broke  out  to  November, 
1917.  On  August  26,  1914,  their  value  was  £21,535,065  as 
compared  with  £189,944,339  on  November  7,  1917,  a  rise  of 
880  per  cent.  Mr.  Palgrave  discusses  the  risks  of  issuing  in- 
convertible money  in  response  to  the  demand  of  the  Treasury 
and  not  to  the  wants  of  trade,  but  what  he  says  are  mere 
conjectures.  However  valuable  they  may  be,  they  do  not 
give  any  tangible  data  as  to  the  condition  of  the  British  trade 
and  thus  they  do  not  permit  one  to  form  any  definite  opinion 
as  to  the  exact  role  which  inflation  has  played  in  raising 
prices.' 

Professor  Pigou's  statement  that  perhaps  four-fifths  of  the 
rise  has  been  inevitable  and  that  not  more  than  one-fifth  of 
the  responsibility  for  it  may  be  thrown  upon  Great  Britain's 
monetary  and  banking  arrangement,  may  be  accepted  for 
what  it  is  worth.  It  is  merely  a  "perhaps,"  prompted  par- 
tially by  the  thought  that  in  view  of  the  large  volume  of 
(British)  commodity  imports  as  compared  with  commodity 
exports,  the  shortage  of  tonnage  and  consequent  rise  of  freights 
must  have  affected  prices  in  Great  Britain  more  than  it  has 
affected  world  gold  prices.' 

One  of  the  most  painstaking  inquiries  into  the  subject  of 
inflation  has  been  made  by  Professor  Nicholson.  However, 
all  of  his  facts  and  figures  also  bear  upon  the  monetary  side  of 
the  situation  and  do  not  throw  any  light  except  by  inference 
on  the  changes  in   the  volume  of  the  country's  business 

'  Sir  R.  H.  Inglis  Palgrave:  "The  Influence  of  the  Currency  Rates  on  Prices," 
Bankers'  Magazine,  December,  1917,  pp.  632-636. 
'  A.  C.  Pigou:  "Inflation,"  The  Economic  Journal,  December,  1917,  p.  494. 


GREAT   BRITAIN 


39 


transactions.  Professor  Nicholson'  takes  up  the  increase  of 
different  forms  of  currency  since  the  beginning  of  the  war  for 
the  purpose  of  showing  to  what  extent  the  increase  has 
deviated  from  the  increase  in  the  prewar  time,  or  has  been 

abnormal.       He  begins  with  postal  orders,  a  form  of  legal 
tender  which  was  unrepresented  before  the  war.    Their  use 
as  currency  has  been  confined  to  the  earliest  stages  of  the 
conflict.     Section  6  of  the  Currency  and  Bank  Notes  Act 
(1914.  4  and  5  Geo.  V,  ch.  14)  which  made  postal  orders  legal 
tender  was  revoked  by  proclamation  dated  February  3,  1915 
During  the  fortnight  ending  August  20,  postal  orders  over 
13,000,000  in  number,  of  the  value  of  £4,600,000  were  issued 
compared  with  5.000,000  in  number  and  £2,000,000  in  value 
during  the  corresponding  fortnight  in  1913.    They  were  issued 
for  the  purpose  of  meeting  immediate  exigencies  and  by  the 
end  of  October,  1914,  the  value  in  the  hands  of  the  public  did 
not  exceed  the  normal  amount.   According  to  Mr.  Nicholson 
postal  orders  may  be  considered  as  the  beginning  of  Treasury^ 
notes  or  the  germ  of  the  inflation.- 

The  net  issues  of  silver  coinage  for  the  five  months  of  the 
war  ,n  1914  were  £5,327.899.  This  compares  with  £318,000 
of  the  first  seven  months  before  the  war,  or  is  about  seventeen 
times  as  great.  The  net  increase  in  silver  in  1915  and  in  1916 
was  m  each  year  about  eight  times  the  average  of  the  four 
prewar  years.* 

Professor  Nicholson  found  a  close  conformity  between  net 
issues  of  silver  and  money  wages.  He  does  not  mean  to  say 
that  the  increase  in  silver  of  itself  raised  wages,  but  that  such 
an  increase  rendered  possible  the  continued  rise.  The  con- 
nection of  wages  and  prices  in  order  of  time  varies  in  different 
cases.  At  the  beginning  of  the  war  the  special  war  demand 
backed  by  government  funds,  raised  some  wages.  Substitu- 
tion and  sympathy  raised  others.  With  the  expenditure  of  the 
new  earnings,  prices  rose  in  response  to  the  fresh  demands. 

»/Wrf.,  pp.  468-469.  ^'''■'^/'^V4. 

•  Ibid.,  p.  469. 


it 


ifij 


40 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


Then  came  the  demand  for  war  bonuses  to  meet  the  increased 
cost  of  living.  The  special  war  bonus  was  followed  by  the 
general  sympathetic  war  bonus. 

Such  a  rise  in  wages  and  in  earnings  was  only  possible  with 
an  increase  of  currency — silver  and  notes.  If  the  restraints 
of  peace  time  on  the  issues  of  currency  had  been  in  force,  a 
monetary  crisis  would  have  put  an  end  to  the  rise.' 

The  issues  of  bronze  from  August  to  December,  1914 
(£132,000)  did  not  exceed  the  average  of  1912-13.  The  in- 
crease in  1915  was  below  that  of  1912-13-  I"  1916,  however, 
bronze  rapidly  increased  to  £450,000,  and  for  the  period  of 
the  war  to  the  end  of  March,  1917,  the  net  increase  was 

£951.689.' 

With  regard  to  the  effect  of  gold  on  prices  many  general 
conclusions  have  been  drawn,  most  of  them  tending  to  show 
that  the  purchasing  power  of  gold  has  been  steadily  dimin- 
ishing. The  world  production  of  gold  has  been  going  on  un- 
checked by  the  war.    Since  1906  it  was  as  follows: 


1906  £80,1 10,204 

1907 82,258.891 

1908 88,666,905 

1909 91.985.496 

1910 90,842,729 

1911 91.875.460 


1912 £94,466,653* 

1913 94.494.000 

1914 90,208,000 

1915 96,525,000 

1916 94.563.000 

1917 88,000,000* 


Gold,  writes  the  Economist,  is  about  the  only  article  which 
the  belligerents  do  not  seek  to  destroy,  so  that  the  war  is 
reducing  the  quantity  of  commodities  without  reducing  the 
quantity  of  gold  in  the  world.'  The  unprecedented  amount 
of  goods  destroyed  daily  in  the  war  ^ones  has  changed  the 
ratio  of  exchange  value  between  the  available  supply  of 
gold  and  commodities.  "Goods  are  not  higher,  but  gold  is 
cheaper."* 

Professor  Nicholson  gives  the  estimated  amount  of  gold  in 
the  United  Kingdom  on  June  30,  1914,  as  £161,100,000.    The 

>  Nicholson:  op.  cit.,  p.  486. 
» Ibid.,  pp.  468-469. 

>  The  Economist,  February  17,  1917.  P- 29*-  ,       .  ^.,  .„.,  ,,„ 

*  The  Statist,  April  13.  1918,  P.  631.  The  figures  for  the  yeare  191371917  are 
taken  from  The  Statist:  they  differ  somewhat  from  those  m  The  Economist. 

»  The  Economist,  February  13.  I9«5.  P-  263. 

•  The  Literary  Digest,  November  24, 1917- 


GREAT   BRITAIN 


4t 


gold  coin  in  the  country  increased  from  £100,000,000  in  1903 
to  £113,000,000  in  1910,  or  less  than  £2,000,000  per  annum. 
From  December  31,  1910,  to  June  30,  1914,  the  estimated 
mcrease  was  £48,100,000,  or  just  under  £14,000,000  per  an- 
num. From  the  outbreak  of  the  war  to  December  31,  1914, 
"the  Bank  jf  England  received  the  enormous  addition  of 
£64,000,000  in  bullion  and  coin,  considerable  amounts  being 
purchased  and  left  in  South  Africa,  Canada  and  other  parts 
of  the  Empire."' 

In  spite  of  this  strong  gold  position,  large  quantities  of 
Treasury  notes  have  been  issued  since  the  very  first  months 
of  the  war.  At  the  end  of  December,  1914,  the  amount 
outstanding  was  £38,500,000;  in  December,  1915,  it  was 
£103,100,000;  in  December,  1916,  £150,000,000.  If  the 
issue  of  Treasury  notes  was  concurrent  with  the  calling  in  of 
gold,  it  would  not  have  caused  any  inflation  of  the  currency, 
but,  as  a  matter  of  fact.  Treasury  notes  were  issued  before 
there  was  any  limitation  of  the  gold  in  circulation.  Gold  was 
not  (to  any  appreciable  extent)  either  hoarded  or  made  into 
ornaments.  The  effect  of  the  notes  was  then  exactly  the  same 
as  if  new  amounts  of  gold  were  added.  The  net  amount  of 
gold  issued  the  year  before  the  war  was  £15,000,000,  which 
was  a  good  deal  above  the  average.  But  in  the  first  five 
months  of  the  war  (to  December,  1914)  £38,500,000  of  notes 
were  issued;  deducting  gold  for  redemption  (£18,500,000),  it 
represents  a  net  addition  of  £20,000,000  in  five  months.  The 
rate  of  increase  of  the  notes,  £55,000,000  per  annum  during 
191 5  and  1916,  was  nearly  six  times  as  large  as  the  annual 
issue  of  gold  from  1908  to  1914.' 

Lastly,  one  must  consider  the  use  of  checks  and  the  amount 
of  bank  deposits  against  which  the  checks  are  drawn.  The 
growth  of  deposits  may  be  obtained  from  the  Economist 
banking  numbers.  In  1913  the  aggregate  was  £1,104,000,000; 
it  increased  to  £1,290,000,000  in  1914,  i.e.,  by  £186,000,000. 
Before  the  war  the  increase  in  deposits  for  the  last  ten  years 

•  Nicholson:  op.  cit.,  p.  471. 
'Ibid.,  pp.  471-472. 


4» 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


had  been  on  the  average  £30,000,000  a  year.  In  191 5  the 
increase  was  £123,000,000;  in  1916,  £210,000,000.  In 
recent  years  checks  became  very  popular  in  England  and 
they  have  supplanted  currency  to  a  very  considerable  extent. 
In  1913,  the  aggregate  London  Bankers'  Clearing  House 
returns  were  £16,400,000,000,  these  returns  by  no  means 
including  all  the  checks  in  the  kingdom.  There  was  a  con- 
siderable decrease  in  town  clearings  from  the  beginning  of 
the  war  until  1917.  From  August,  1914,  to  December,  1914, 
as  compared  with  the  same  period  in  1913,  the  decrease  was 
33.8  per  cent.  The  decrease  in  1915  as  compared  with  1913 
was  22  per  cent  and  in  1916  it  was  about  7  per  cent.  This 
decrease  was  due  largely  to  restrictions  on  financial  dealings. 
In  1917  the  total  town  clearing  rose  to  £16,877,000,000,  thus 
exceeding  by  £3,474,000,000  the  clearing  in  191 6  and  by 
£477,000,000  that  in  1913.' 

A  study  of  country  clearings  which  represent  commercial 
checks  as  distinct  from  checks  purely  financial  in  character 
shows  an  increase  about  fivefold  over  the  prewar  rate  of  in- 
crease. The  total  country  clearings  fori9i5  were  £1,567,000,- 
000,  compared  with  £1,389,000,000  for  1913,  an  increase  of 
£178,000,000,  or  13  per  cent.  The  increase  in  1916  whs 
£483,000,000  over  1913,  or  35  per  cent.'  In  1917  the  country 
clearing  was  £2,244,000,000,  an  increase  of  £372,000,000  over 
1916,  or  19.85  per  cent.' 

In  connection  with  these  data,  Professor  Nicholson  makes 
an  attempt  to  determine  the  volume  of  British  trade.  He 
assumes  that  with  the  same  level  of  prices  the  increase  in  the 
country  clearings  may  be  said  to  measure  roughly  the  increase 
in  the  volume  of  trade.  The  Statist  index  numbers  show  a 
rise  in  prices  from  85  in  1913  to  136  in  1916,  an  increase  of  60 
per  cent.  If  the  volume  of  trade  had  remained  the  same,  the 
country  clearing  returns  would  have  shown  an  increase  from 
£1,389,000,000  in  1913  to  £2,?22,ooo,ooo  in  1916  (60  per 
cent),  instead  of  an  increase  to  £1,872,000,000,  or  35  percent 

>  The  Economist,  May  l8,  1918,  p.  781. 

'  Nicholson:  op.  eit.,  p.  471. 

•  The  Economist,  May  18,  191S,  p.  781. 


GREAT  BKITAIN 


43 


only.  According  to  Mr.  Kitchin,  the  volume  of  British  trade, 
taking  Statist  figures  as  a  basis  and  with  1913-100,  was  as 
follows:     for  1914— 86§,  1915—861,  1916— 81. 

Before  discussing  the  connection  between  the  abnormal 
increase  of  currency  and  the  abnormal  rise  in  prices,  Professor 
Nicholson  is  careful  to  repudiate  the  acceptance  of  the  quan- 
tity theory  in  the  simplest  form,  even  after  allowing  for  the 
rapidity  of  circulation.  He  suggests  that  an  alternative  expla- 
nation of  the  relation  between  the  two  increases  is  that  the  rise 
in  prices  was  due  in  the  first  place  to  obstruction  of  supply  and 
intensification  of  demand,  and  that  with  rising  prices  more 
currency  has  been  called  for  to  do  the  monetary  work.  Prices 
may  rise  first  of  all  through  speculation,  and  it  is  only  when 
the  inflated  prices  have  to  be  translated  into  money  wages 
and  other  incomes  that  the  real  demand  for  more  currency 
arises.'  The  proper  test  to  apply  in  any  particular  case  in 
considering  the  relations  between  the  two  increases  is  the 
order  of  time.  As  Treasury  notes  have  taken  the  place  of 
gold  in  Great  Britain,  they  may  be  said  to  form  the  most 
important  part  of  the  legal  tender  currency. 

In  trving  to  ascertain  the  relation  between  the  issue  of 
Treasi :/  notes  and  the  rise  in  prices,  Mr.  Nicholson  took 
quarterly  periods  and  compared  the  two  sets  of  increases.  He 
found  that  if  one  compares  the  same  periods  quarter  by 
quarter  there  does  not  seem  to  be  any  connection.  If,  how- 
ever, the  comparison  is  made  of  the  note  increases  in  one 
quarter  with  the  index  number  increases  in  the  following 
quarter  there  is  a  remarkable  correspondence.  For  exam- 
ple, the  large  note  increase  in  the  December  quarter,  19 14, 
is  followed  by  a  large  index  number  increase  in  the  next 
quarter— March,  1915.  The  slight  increases  of  notes  in  the 
next  two  quarrers  are  followed  by  slight  increases  only  in 
mdex  numbers.  The  very  large  increase  in  notes  in  the 
September  and  December  quarters  of  1915  is  followed  by  a 
large  increase  in  the  next  two  quarters  in  index  numbers. 
For  the  remainder  of  the  war  period  up  to  July,  1917,  the 
'  The  Economist,  May  i8,  1918,  p.  480. 


]l 


PRICES  AND  PRICE  COKTROL  DURING  THE  WAR 


correspondence  in  quarters  was  not  so  striking,  but  the  gei  • 
eral  trends  of  expansion  have  been  the  same.' 

According  to  Mr.  Nicholson,  in  (••(ier  of  time,  the  abnormal 
increase  of  currency  preceded  the  abnormal  rise  in  prices  and 
in  wages,  and  if  the  inflation  of  the  currency  continues  the 
rise  of  prices  will  also  continue.  In  contrast  to  Professor 
Nicholson's  views  are  the  conclusions  to  which  a  Select  Com- 
mittee of  the  British  House  of  Commons  arrived  in  its  search 
of  what  caused  the  rise  in  prices.  While  the  committee  of 
investigation  admits  that  the  extension  of  bank  credits  due 
to  the  war  had  had  its  effect,  it  calls  attention  to  the  fact  that 
the  stock  of  gold  in  Great  Britain  had  uocreased,  instead  of 
increased.  As  to  the  relation  between  the  advance  in  prices 
and  the  volume  of  outstanding  currency,  the  committee  states 
that  "  the  issue  of  paper  currency  .  .  .  plays  a  very  sub- 
ordinate part.  The  large  increase  in  the  amount  of  currency 
(by  about  50  per  cent)  is,  in  the  opinion  of  the  committee,  the 
result  of  the  growth  of  transactions  and  of  prices,  and  not  the 
cause  of  them."  The  chief  causes  of  the  rise  in  prices  are 
thus  stated  by  the  committee:  "the  falling  short  in  the  sup- 
ply of  goods  as  compared  with  demand;  the  expenditure  of 
payments,  made  by  the  government  for  commodities  and 
services,  in  buying  goods  for  private  consumption."' 

Of  interest  in  connection  with  this  discussion  may  be  some 
data  showing  the  extent  of  the  world  "  inflation."  The  amount 
of  money,  gold,  silver  and  uncovered  paper  in  circulation  in 
forty  principal  countries  of  the  world  increased  from  $9,830,- 
000,000  in  1895  to  $24,660,000,000  in  1917,  an  increase  of 
150  per  cent,  while  population  increased  13  per  cent.  The 
amount  of  "uncovered"  money  increased  since  1913  in  coun- 
tries at  war  400  per  cent.  Equally  large  has  been  the  increase 
in  "promises  to  pay."  The  total  national  debts  of  the  world 
in  1895  were  $28,750,000,000,  in  1913,  $43,840,000,000;  by 
July,  191 7,  they  rose  to  $160,000,000,000.' 

»  The  Economist,  May  i8,  1918,  pp.  481-482. 
'  Bankers'  Magazine,  July,  1918,  p.  7. 
*  Business  Digest,  1917,  p.  1491. 


GREAT  BRITAIN 


Increased  Consumption 


4S 


Increased  consumption  has  been  held  responsible  for  quite  a 
substantial  rise  in  prices  before  the  outbreak  of  war.  A 
greater  equalization  of  wealth  raised  "tremendously"  the 
purchasing  power  of  the  people.'  The  war  brought  with  it  an 
insistent  and  inelastic  demand  on  the  part  of  the  government 
for  all  kinds  of  commodities  needed  to  feed,  clothe,  equip, 
house  and  transport  the  army.  Money  paid  by  the  govern- 
ment filters  through  to  the  people  engaged  in  production  and 
thus  creates  an  additional  effective  demand,  higher  wages  are 
being  paid,  war  bonuses  are  being  given,  family  incomes  be- 
come larger  because  of  remunerative  employment  of  women 
and  children. 

"A  soldier,  whether  at  the  front  or  not  eats  alxiut  half  as 
much  again  as  in  private  life,"  said  Mr.  Pretyman  in  a  de- 
bate on  prices  in  the  House  of  Commons.  "Millions  of  men 
are  now  serving  .  .  .  and  the  consumption  of  food  among 
them  is  anything  from  half  as  much  again  to  twice  as  much  as 
in  normal  civilian  life."*  The  report  of  the  committee  ap- 
pointed by  the  United  Kingdom  to  study  food  prices  gives 
as  one  of  the  causes  of  the  rise  an  "abnormal  consumption 
of  food,  fodder  and  clothes  by  armies  in  the  field."' 

This  abnormal  consumption  has  been  partially  due  to  a 
certain  amount  of  loss  through  waste,  an  unavoidable  accom- 
paniment of"  provisioning  soldiers  on  the  firing  line,  and  par- 
tially to  healthy  appetites  of  those  who  spend  their  time  in 
strenuous  exercising  in  the  open  air.  The  wear  and  tear  on 
clothing,  shoes,  etc.,  is  obviously  also  very  great  and  these 
articles  need  continuous  replenishing. 

At  the  same  time  large  sections  of  the  working  population 
became  buyers  of  more  and  better  food  than  formerly.  Ac- 
cording to  Mr.  Runciman  "the  general  testimony  in  favor 
of  this  judgment  is  overwhelming."*     The  workers  have  been 

•  W.  A.  Kiddy:  "  InAation,"  Jcumal  of  the  Institute  of  Actuaries,  October.  IQ17. 
p.  287. 

•  The  Economist,  August  26,  1916,  p.  355. 

•  Chicago  Commerce,  August  30,  191 7,  p.  14. 

•  Mr.  Runciman's  speech  in  the  House  of  Commons,  quoted  from  The  Nation, 
Octoberai,  1916. 


nUCSS  AND  PRICK  CONTR(».  DURING  THB  WAR 


spending  money  "on  the  liberal  scale  to  which  they  have 
become  accustomed  in  the  early  and  seemingly  prosperous 
months  of  the  war,  automatically  raising  the  prices  against 
themselves."' 

The  statement  with  regard  to  greater  consumption  on  the 
part  of  the  civilian  population  hardly  holds  true  in  the  case  of 
meat.  Before  the  war  40  per  cent  of  the  nation's  consumption 
of  beef  and  mutton  was  supplied  by  imports;  this  dropped  to 
only  20  per  cent  in  1915.  The  main  reasons  for  the  decline 
were  the  abnormal  demand  for  frozen  meat  for  the  armies  of 
the  Allies  and  the  increased  dependence  of  France  on  foreign 
imports.*  These  causes  continued  to  operate  through  the 
subsequent  years  of  the  war. 

As  a  result,  on  the  one  hand,  of  the  reduction  of  the  im- 
ported supplies  and  attendant  high  prices  and,  on  the  other 
hand,  of  the  appeals  made  by  the  government  to  the  citizens 
in  general  to  curtail  their  use  of  meat,  the  civilian  consump- 
tion of  beef  and  mutton,  according  to  the  Board  of  Trade 
estimates,  has  latterly  (in  1916)  been  reduced  by  about  one- 
sixth.* 

There  is  a  discrepancy  between  this  finding  of  the  Board 
of  Trade  and  the  contention  that  one  of  the  main  causes  of 
the  rise  in  the  price  of  meat  has  been  the  increased  demand  of 
the  masses  of  people,  owing  to  the  better  wages  they  were 
earning.  According  to  the  Spectator,  the  Board  of  Trade  has 
had  reports  from  all  the  principal  industrial  centers,  showing 
how  the  working  classes  are  buying  meat  much  \ore  freely 
than  before,  and  do  not  hesitate  to  pay  the  h  nrices  for 
the  best  joints.*  In  order  to  reconcile  the  tv..  statements, 
one  must  assume  that  the  curtailment  of  consumption  has 
been  exercised  by  other  classes  of  population  than  the  indus- 
trial workmen. 
The  price  of  milk  has  been  forced  upwards,  according  to  the 


'  Hurd:  op.  cit.,  p.  43. 

!  ^i*?""^  (interim)  of  the  "Board  of  Trade  committee  on  prices,  Cd.  8358,  p.  8. 
'  Ibid.t  p.  6. 

*  W.  F.  Ford:  "Currency  Inflation  and  the  Cost  of  Living,"  Fortniehtly  Review, 
January,  ig-'p.  83. 


GIBAT  BRITAIN  ^ 

Board  of  Trade  Committee  on  Prirc»,  by  "the  increased  de- 
mand  of  the  producers  of  margarine,  tinned  milk  and  milk 
chocolate,  together  with  that  of  the  hospiuls."' 

The  view  that  national  consuming  capacity  has  on  the 
whole  mcreased  is  combated  by  Mr.  Ford,  who  contends  that 
agamst  any  possible  increase  caused  by  the  average  soldier 
consummg  more  now  than  he  did  when  he  was  a  civilian  must 
be  set  a  decrease  of  national  consuming  capacity  as  a  result 
of  the  impoverishment  of  numerous  people  who  have  had  to 
suffer  privations  because  their  incomes  have  Ixcn  stationary 
or  dimmished  while  prices  have  gone  up.'     Whether  one 
agrees  or  disagrees  with  this  view,  one  must  admit  that  the 
only  right  way  of  determining  to  what  extent,  if  any.  national 
consumption  has  increased  is  to  make  comparisons  U-tween 
the  prewar  and  the  war  period  and  to  make  these  comparisons 
on  the  basis  of  quantities,  not  prices.    The  necessary  figures 
to  enable  one  to  do  this  are  not  availah'i-. 

Reckless  Buying 
The  forces  must  Ix-  liberally  supplied  with  food,  clothing 
munitions  The  government  enters  the  market  as  a  heavy 
buyer  with  "unlimitf  •"  means  and  in  a  hurry,  cost  being  no 
object.*  Military  pu.  .bases  have  not  \^n  of  the  most 
economical  type.  "There  has  been  too  much  of  the  amateur 
m  the  market,  who  generally  pays  very  dear  for  his  opera- 
tions.  * 

Higher  Cost  of  Production 
The  average  cost  of  producing  and  of  marketing  commodi- 
ties has  risen  since  the  beginning  of  the  war  because  in  order 
to  satisfy  a  rapidly  increasing  demand  it  became  necessary 
to  resort  to  less  efficient  factors  of  production.  Many  skilled 
workmen  were  withdrawn  from  peace  time  industries  for  war 
activities;  and  a  great  deal  of  unskilled  labor  was  injected  into 

'  The  Spectator,  vol. 


^v~.w,  ,ui.  1 17,  1916,  p.  456. 

p.  12*'"'^  ('"tenm)  of  the  Board  of  Trade  Committee  on  Price.. 

'k\^aZ'K°^-.'^-  pPo  739-740. 

•  Kiddy:  op  ctt.,  p.  278. 


Cd.8358.     1916, 


1  Hl<  «S  AWD  P«IC«  CONTtOt  Dl  «INC  THE   WA« 


minet.  mills  and  factories  for  the  purpose  of  maintaining  and 
raising  the  n:,put.  I'nder  present  temporary  and  abnormal 
conditions  very  source  of  supply  must  be  brought  into  use 
and  fHit  into » >pir  ition  "  upon  a  basis  of  cost  which  would  have 
been  prohibiten  at  any  other  time  within  the  last  thirty 
years."' 

In  cons  iiu'  he  causes  of  the  advance  in  retail  prices  of 
meat,  v  i  .  > .  n  inember  i,  1916,  averaged  about  sid  per 
pound  ai"s  •  iom  of  July,  1914,  the  Board  of  Trade  C  >mmit- 
tee  on  Pr  t.  r  oi  *ed  that  "to  a  certain  extent  'his  incnase 
can  be  a'  -iici  ..( >  lunted  for  in  terms  of  cost  of  production, 
which  h  .3    '■a'  '•.    •''^' 

"The  c  )vt  ■  nm<  nr    1  :- ,»  curly  stage  of  the  war  put  restric- 

ding  stuffs,  including  oil  cakes,  maize, 

ilso  on  fertilizers.     .     .     .     Neverthe- 

'ng  stuffs  and  fertilizers  have  risen 


tionson  ilt    ^xp.i 
barley  anc)  i>at8,  mi 
less  the  p'  ces  o    I 
greatly." 


Averaw  Price  per  Ton  Average  Price  per  Ton 
before  the  War 


Feeding  stuffs: 

Linieed  Cake 8  5 

Cotton  See<l  Cake 5  '6 

Soya  Bean  Cake 6  1.I 

Mai2e  Meal 7  '" 

Fertilizeri: 

Nitrate  ol  Soda  (bett) 10  14 

Basic  Stag  (prime  quality  |J  p.  c. 

Khosphorus) i  16 

ate  of  Ammonia 13  i  > 


lu 

3 
8 
o 


in  July, 
£   s. 

1916 
d. 

13    15 
9  15 

13   3 

II   8 

9 
9 
6 
0 

18   5 

0 

3   0 
17  13 

6 
I 

Decline  in  the  Supply  of  Commodities 

The  decline  in  the  supply  of  many  commodities  has  been 
due  to  the  diversion  of  men  to  the  armies  and  to  the  pro- 
duction of  goods  for  the  operation  of  war.'  While  some  main- 
tain that  because  of  the  worldwide  diversion  of  labor  there 
has  been  a  worldwide  curtailment  in  the  production  of  foods, 

'  Marsh;  "Economic  Difficuhies  in  the  Way  of  Successful  Price  Fixins,"  The 
Economic  World,  July  21,  1917,  p.  79- 

»  Report  (interim)  of  the  committee  appointed  by  the  Board  of  Trade  to  myes- 
tigate  the  principal  causes  which  led  to  the  increase  of  prices  of  commodities 
since  the  beginning  of  the  war,  Cd.  8358,  1916,  p.  7. 

•  Labour  Gautte  (Canadian),  September,  1917,  P-  7H- 


i' 


GKIAT   BRITAIN 


49 


raw  materials  am\  finished  commodities,'  others  blame  the 
reduction  in  British  sea  carrying  capacity  for  the  shortage. 
"The  nation  has  apparently  not  yet  realiiwl,"  writes  Mr. 
Hurd,  "that  there  is  plenty  of  food  to  be  had  over  the  seas 
and  that  there  are  ample  supplies  of  raw  material  for  industry 
available  If  we  possessed  the  necessary  tf»nnaKc.  .  . 
The  unrivalled  resources  of  thisi  country  for  making  good 
the  losses  to  shipping  are  not  lieing  utiliziil  to  the  fullest 
extent."' 

The  diversion  of  men  from  prrxluctive  work  to  other  pur- 
suits has  led  to  greater  use  of  machinery,  to  working  overtime 
and  to  enlisting  more  female  lal)»)r  into  milts  and  factories, 
as  well  as  into  agricultural  activities,  Uut  all  this  only  miti- 
gated the  effect  oi  diversion  without  entirely  offsetting  it. 

The  decline  in  supplies  is  also  the  result  of  the  destruction 
of  property  on  land  by  the  pus-age  of  armies  and,  what  is  of 
greater  immt-diate  hi^nificanr  e  to  Great  Britain,  through  the 
sinkinjr  of  ships,  many  of  which  were  carrying  towards  the 
Isles  thousands  of  tons  of  •'  -'xl  and  raw  material. 

The  decline  in  the  available  tonnage  resulted  in  the  narrow- 
ing of  the  markets;  many  sources  of  supply  have  been  grad- 
ually eliminated  because  of  distance,  as  ships  can  not  be 
spared  for  long  routes  on  account  of  the  length  of  time 
consumed  in  going  and  in  coming; 

The  South  Wales  panel  of  the  Commission  of  Inquiry  into 
Industrial  Unrest  in  Great  Brit  lin'  was  "  inclint  .1  provisionally 
to  adopt  the  view  that  the  major  part  of  the  increased  cost  of 
food  is  due  in  part  directly  and  ir  part  inrlinctly  to  the 
destruction  of  tonnage  by  enemy  submar  nes." 

Milk  prices  rose  liecause  the  rapidly  r  sing  i.iat  prices  of 
1915.  accompaniel  as  the}   were  by       short.Jtje  of  lalwr,  led 

kISL  **•  Rfy"°W»:  "Steady  Business  to  Nfer-   Wars  Shock,"   The    S'attcn's 

lmi^i^^.„/*°'''""o-     •.;     '"':""  '■"'■   ■:<"li"warandinthe[.r.>.luctionof 

munitions  of  war.  •    Quoted  from  the  (  tcag-   Commerce.  August  xo.i;,  7  p   14 

'Hurd;  u/>.  fi'.,  pp.  50-52.  '■k     t 

'Infra,  p.  100. 


I 


50 


PRICES  AND  PKICE  CONTROL  DURING  THE  WAR 


to  some  slaughtering  of  milk  cows.*  It  was  necessary  by 
orders  dated  June  22  and  August  18,  1915  (the  latter  of  which 
was  amended  on  March  31,  1916)  to  put  a  restraint  upon  the 
slaughtering  of  cows  obviously  in  calf.  At  the  same  time  a 
limit  was  put  upon  the  slaughter  of  calves  under  six  months 
old.  Not  a  few  fanners  were  anxious  to  abandon  the  dairying 
business  because  of  the  long  hours  of  labor  involved  in  it  and 
because  of  strict  legal  requirements  as  to  sanitation  and 
quality  of  milk. 

The  bearing  of  shortage  upon  prices  may  be  seen  in  compar- 
ing grain  conditions  of  1915  and  early  1916  with  conditions 
towards  the  end  of  1916  and  through  1917.  It  was  the  record 
crops  of  1915  which  made  the  problem  of  supply  easy  to  solve. 
In  1916  there  were  short  crops  all  over  the  world.  Shortages 
developed  not  only  in  grain  but  also  in  potatoes,  the  result 
being  a  rapid  rise  in  prices.* 

In  1916-17  there  were  harvested  in  Argentina,  Australia 
and  New  Zealand  about  61,581,000  quintals,  as  compared 
with  97,864,000  in  1915-16,  and  67,080,000,  the  avers^e  for 
the  five  years,  1909-1913,  the  decline  being  due  to  an  excep- 
tionally small  crop  in  Argentina.* 

One  of  the  contributory  causes  for  the  rise  in  meat  prices 
was  the  severe  drought  of  1915  in  Australia,  which  destroyed 
a  large  quantity  of  stock  and  greatly  curtailed  Australian 
supplies.*  The  reduction  in  the  number  of  live  stock  in  differ- 
ent parts  of  the  world  manifested  itself  again  in  1916  because 
of  the  demands  of  the  war,  shortage  of  feed  and  the  drought 
of  the  summer.* 

The  sharply  and  rapidly  rising  prices  made  the  statistics  of 
the  values  of  British  imports  and  exports  of  no  assistance  for 
the  purpose  of  obtaining  data  as  to  the  amount  of  commodi- 
ties imported  and  exported  since  the  beginning  of  the  war. 

'  Report  (interim)  of  the  Board  of  Trade  Committee  on  Prices,  Cd.  8358,  1916, 
p.  II. 

*  Labour  Gaselte  (Canadian),  May,  1917,  p.  393. 

*  Bulletin  of  Agricultural  Statistics,  published  by  the  International  Institute  of 
Agriculture  in  Rome;  quoted  from  The  Economist,  March  31,  1917,  p.  584. 

*  Report  (interim)  of  the  Board  of  Trade  committee  on  prices,  Cd.  8358,  1916, 
P-9- 

'Labour  Gazette  (Canadian),  May,  1917,  p.  393. 


GREAT   BRITAIN  k] 

Some  light  may  be  thrown  on  this  question  by  comparing 
the  yearly  returns  of  foreign  trade  shipping  of  the  country.' 

.   Entered  (with  Cargoes)  '"**  ""  '"4 

^.•:::::;;;:::::::::::_5J^     ^^     jJSS 
Fo«it;.::::;:.:: llfAtl      ?»§^°      3»-5'5-«'4 

'  17.a44.g07  19,148.832  a3,452,755 

'^'"*' 35.59«..754  39.5*9.362  55.968.569 

The  above  figures  show  that  the  entry  of  ships  with  cargoes 
decreased  from  1914  to  1916  by  13,001,355  tons,  and  the  clear- 
ance by  20,371,815  tons. 

During  the  same  period  the  change  in  the  value  of  imports 
and  exports  was  as  follows:* 

.xMPORTS  AND  EXPORTS 

Merchandise 
imiiorts  Exports  Exports 

c.  1.  f.  (?"tj»l'J  (Foreign  and      Export. 

Values        f.o.b.  Values  Colonial)  (Total) 

f.  o.  b.  Values 

*  £  £  £ 

[lit 949.I5».679    506.546.312    97.608,502   604,154.714 

[l\i 55I'!9^'35°    384.868,448    99.o62.?8i    483  936,629 

""* 696.635.113    430.721.357    95.474.166   ^ils.^ 

The  value  of  imports  increased  from  IQ14  to  1916  by  £252,- 
517,506,  and  the  value  of  exjxjrts  by  £77,959,191.  The  ac- 
counts of  goods  imported  do  not  include  certain  goods  which 
at  the  time  of  importation  were  the  property  of  the  British 
Government  or  the  governments  of  the  Allies.  The  accounts 
of  goods  exported  include  goods  bought  in  the  United  King- 
dom  by  or  on  behalf  of  the  governments  of  the  Allies,  but  do 
not  include  goods  taken  from  British  government  stores  and 
depots  or  goods  bought  by  the  British  Government  and 
shipped  on  government  vessels.  Unofficial  estimates  placed 
the  value  of  the  excluded  imports  at  from  £120,000,000  to 
£150,000,000  in  I9I5.« 

ber'^o.t  tof  ^r«V'°"  ^'^"""'  '^'"'"  "^  '^"""^^  ^""'^  ^"P"''  Decern- 
*'lbid..'p.  I.  ■    ■ 

•  "Trade  in  War  Time.'   The  Political  Quarterly,  March,  1916,  p.  loi. 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


The  imports,  exports  and  reexports  in  1917  were  £1,065,- 
256,407,  £525,308,991  and  £69,552  respectively.'  These  fig- 
ures profess  to  include  for  the  last  six  months  of  the  year  (July 
to  December)  certain  government  imports  not  included  in  the 
figures  of  the  previous  years,  namely,  articles  imported  and 
exported  in  public  as  well  as  private  ownership  "so  far  as 
particulars  are  available  at  the  time  of  compilation." 

As  the  Economist  remarks,  no  one  can  tell  the  degree  of 
omission  concealed  behind  this  cryptic  reservation.  Exports 
for  the  use  of  British  forces  in  any  theatre  of  the  war  are  still 
excluded.  Presumably  also  supplies  shipped  straight  to  the 
British  armies  in  France  and  elsewhere  do  not  appear  in  the 
published  import  figures.*  Imports  of  food  have  always  been 
included  in  the  returns.  The  figures  of  the  Economist  for 
1916  differ  somewhat  from  those  given  in  the  preceding  table. 
Taking  these  figures  (£948,506,492),  the  rise  in  the  value  of 
imports  in  1917  over  1916  was  £116,749,915.  In  order  to 
arrive  at  the  quantity  of  goods  imported  and  exported,  the 
Economist  until  last  year  had  the  practice  of  recalculating 
the  individual  items  of  trade  returns  at  prices  of  the  preced- 
ing year,  and  also  at  prices  of  1913  (the  prewar  year). 

The  table  Opposite  gives  the  recalculated  figures  of  the 
returns  for  1916  at  1913  and  1915  prices,  as  well  as  the  value 
of  trade  during  these  three  years  according  to  the  existent 
prices. 

The  calculation  at  1913  prices  shows  that  while  the  re- 
corded value  of  imports  rose  between  1913  and  1916  by 
£180,500,000,  the  quantity  of  goods  imported  in  reality  de- 
clined by  £112,800,000  (14J  per  cent),  higher  prices  making 
it  appear  as  if  the  volume  of  imports  rose  by  £293,300,000  (27  J 
per  cent.)'  The  total  turnover  of  trade,  which  was  higher  by 
£149,800,000,  according  to  the  published  figures,  really  de- 
clined by  £284,200,000  (20  per  cent),  but  higher  prices  caused 
an  increase  of  434,000,000  (31  per  cent)  in  the  recorded  value. 
An  analysis  of  the  individual  groups  of  imports  for  1916  as 

»  The  Economist,  January  19,  1918,  p.  76. 

•  Ibid. 

'Ibid.,  January  aj,  1917,  pp.  130131. 


GREAT  BRITAIN  53 

Value  of  Value  of 

1916  1916 

Value       Trade  at  Value       Trade  at       Value 

Recorded        1913  Recorded        1915        Recorded 

m  1916        Prices  in  1913        Prices         in  1915 

Food  and  dnnlc 419.5  ,76. 9  290. »  353  5  380.9 

Raw  materials 337.0  249.7  *8i.8  JI5.4  ,86.6 

Manufactures 1893  la?  1  1936  150.8  181 .4 

Total    imports    (incl. 

British^pirts; ^'^  '  '"'  ^'^ ^  743-.  851.9 

Foodanddrink 29.5  ao.6  v6  24  s  ski 

Raw  materials 643  38.3  699  46.3  52:4 

Manufactures 393  7  306.7  411  4  329.9  292.9 

Total  British  exports 

Reexport"*;"' ""'^ "*'  ^^"  '*'-  '♦'9^  3849 

Foodanddrink 21. i  17.3  15.9  ,8.8  22.4 

Raw  materials 49.1  44.2  64.0  381  54.6 

Manufactures 27.3  22.0  29.5  24.8  22.0 

Total  reexports  (incl. 
"•'»■) 97  6  83.5  109.6  81.7  99.1 

Totaltumover 1,553  3       1.119  3      '1,4035       1,244.5      ''1,335.9 

•  The  Economist,  January  27,  19 17,  p.  130. 
*Ibid.,  January  20,  1917,  p.  81. 

compared  with  1913  shows  that  had  prices  remained  at  the 
1913  level  the  value  of  foodstuffs  imported  would  have  de- 
clined by  £13,300,000  (4J  per  cent),  but  the  higher  prices 
were  responsible  for  a  recorded  increase  of  £129,300,000. 
The  value  of  imported  raw  materials  would  have  declined  by 
£32,100,000  (about  II  i  per  cent),  but  a  rise  in  prices  made  the 
value  appear  £55,200,000  higher.  Of  manufactures,  the  value 
would  have  been  reduced  by  £66,500,000  (34  per  cent),  the 
increase  in  prices  resulting  in  a  recorded  decline  of  only 
£4,300,000. 

The  calculation  at  191 5  prices  shows  that  there  was  ac- 
tually a  decline  of  £91,400,000  in  the  value  of  trade  in  1916, 
as  compared  with  1915,  while  the  published  figures  recorded 
an  increase  in  the  total  movement  of  goods.  The  rise  in  prices 
is  responsible  for  an  increase  of  £308,800,000.  The  volume 
of  trade  declined  by  over  6  per  cent,  but  the  average  prices 
increased  by  24.8  percent.   An  analysis  of  the  individual  groups 


11 J 


PRICES  AMD  PRICE  CONTROL  DURING  THE  WAR 


!  f. 


of  imports  for  1916  as  compared  with  1915  shows  that  the 
quantity  of  foodstuffs  imported  declined  to  the  extent  of  £27,- 
400,000  (7  percent),  but  the  average  prices  were  17^  per  cent 
higher,  resulting  in  a  recorded  increase  of  £38,600,000.  In 
the  case  of  raw  materials,  the  decline  was  equal  to  £51,200,000 
(18  per  cent).  The  prices,  howeve.*-,  went  up  by  35.5  per  cent, 
accounting  for  an  increase  of  £101,600,000  in  value.  The 
imports  of  manufactures  declined  by  £30,700,000  (17  per 
cent),  but  a  rise  of  21  per  cent  in  prices  made  the  value  appear 
£38,500,000  higher.^ 

One  must  keep  in  mind  also  that  imports  are  given  at  c.  i.  f. 
(cost,  insurance  and  freight)  prices  and  that  an  increase  in 
freight  and  insurance  rates  besides  the  rise  in  average  prices 
accounts  for  the  great  increase  in  the  value  of  imports. 

Particulars  of  quantities  for  food,  drink,  tobacco  are  no 
longer  obtained  in  the  returns  so  as  to  keep  the  enemy  in 
ignorance  of  the  actual  tonnage  of  goods  received.  Statistics 
are  available  for  other  imports  and  examples  of  higher  value 
and  smaller  quantities  are  furnished  by  raw  cotton,  of  which 
16,213,713  centals  of  100  pounds  were  purchased  in  1917 
for  £110,590,634,  as  compared  with  a  purchase  of  21,710,022 
centals  for  £84,729,677  in  1916,  and  of  26,476,161  centals  for 
£64,671,623  in  1915. 

Mr.  Paish  stated  in  May,  1916,  that  as  far  as  available 
data  permitted  an  opinion  to  be  formed,  the  small  decline 
in  production  in  Great  Britain  in  1915  was  offset  by  in- 
creased imports  from  abroad,  due  mainly  to  government 
purchases,  and  by  reduced  exports,  so  that  the  country's 
consumption  in  1915  was  much  greater  than  it  was  in  1913, 
the  last  complete  year  of  peace.*  This  conclusion  differs 
from  the  conclusions  of  the  Political  Quarterly,  which  wrote 
in  its  March,  1916,  issue  that  "the  first  and  the  most 
striking  feature  of  trade  returns  is  the  enormous  incretise 
in  the  price  paid  for  food  supplies."  According  to  this 
magazine,  "the  United  Kingdom  paid  in  1915  an  increased 

>  The  Economist,  January  20,  1917,  p.  81. 

*  George  Paish:  "War,  Finance,"  Journal  of  the  Royal  Statistical  Society,  May, 
1916,  p.  376. 


GREAT   BRITAIN 


55 


price  of  over  ninety  millions  for  if  anything  a  less  amount 
of  food  than  was  imported  in  1913." '     In  the  latter  part  of 
1916  the  Nation  quoted  Mr.  George  Lambert,  who  pointed 
out  that  some  actual  shrinkage  in   home  production  was 
taking  place.    According  to  the  Nation,  against  this  reduc- 
tion in  the  home  supply  must  be  set  the  unknown  quantity 
of  imports,  which,  being  bought  abroad  and  brought  over  by 
the  government  for  the  use  of  troops,  do  not  figure  in  the 
statistics  of  imported  food.     "If   half  our   troops."   writes 
the  Nation,  "are  supplied  in  this  way.  this  means  that  some 
two  and  a  half  million  men  must  be  deducted  from   the 
population  which  our  ordinary  imported  and  home  grown 
supplies  have  to  provide  for.    Thus  it  appears  quite  intelli- 
gible that  there  may  be  no  real  shortage  of  supplies  of  bread 
and  meat  for  our  population,  in  spite  of  the  strain  upon 
transport  and  the  apparent  reduction  in  the  numljer  of  retail 
butchers    shops.-'    The  Nation's  reference   to  government 
importations  is  palpably  wrong,  as  the  accounts  of  importa- 
tions, while  excluding  until  July  i.  1917,  certain  goods  which 
at  the  time  of  importation  were  the  property  of  the  British 
Government  or  the  governments  of  the  Allies,  never  excluded 
food  imports.    Mr.  Lambert's  statement  that  there  has  been 
a  shrinkage  in  home  production  since  the  beginning  of  the 
war  was.  at  the  time  when  he  wrote,  supported  to  a  certain 
extent  by  facts. 

There  was  no  real  shortage  of  food  during  the  first  two 
years  of  war,  if  one  accepts  the  report  of  a  committee  of  the 
Koyal  Society  which,  at  the  request  of  the  President  of  the 
Board  of  Trade,  made  a  searching  investigation  of  the  food 
supply  m  the  United  Kingdom.  However  scientific  mav  \^ 
conclusions  based  on  g  ammes  of  protein  and  of  carb.'  y- 
dra-7s  or  on  calories  of  enerRv  value,  they  do  not  give  an  e.x.  ct 
view  of  the  food  situation,  as  they  do  not  show  the  availability 
of  the  most  desirable  or  most  sought  for  articles  of  diet 
l^eople  do  not  go  into  grocery  stores  for  grammes  of  carbo- 
hydrates, protein  or  fat;  they  ask  for  eggs,  cheese  or  butter 

1  ^?'''^'''  ^MOfter/y,  March,  1916,  p.  103 
The  Nation,  October  ai,  1916,  p.  102. 


H 


$t  PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 

and  if  the  supply  of  these  articles  is  not  sufficient  to  meet  the 
demand,  their  price  will  go  up,  even  though  there  may  be 
plenty  of  sago  or  fish  on  the  market.  This  has  been  particu- 
larly true  of  Great  Britain.  The  Englishman  has  been  de- 
scribed as  very  exacting  in  his  demands,  not  content  with 
a  sufficient  supply:  "it  must  be  of  the  kind  that  suits  him. 
.  .  .  He  is  a  creature  of  habit  and  grumbles  extremely 
if  he  is  forced  against  his  will  to  change  it,  even  to  the  extent 
of  drinking  another  kind  of  tea."'  Having  been  able  to  draw 
upon  the  whole  world  for  necessaries  and  luxuries  of  life,  he 
became  probably  the  most  pampered  person  in  the  world  in 
his  choice  of  food. 

A  change  of  diet  is  not  accomplished  overnight;  it  takes 
time  to  learn  the  usage  and  value  of  substitutes,  and  while 
under  a  supreme  test  people  will  eat  horses,  dogs  and  cats, 
as  the  Parisians  did  during  the  siege  of  Paris,  in  1870-71, 
they  will  not  give  up  their  customary  food  even  for  more 
nutritious,  and  what  some  may  consider  more  palatable,  stuff 
until  they  actually  feel  the  imperative  need  for  such  action. 

The  Royal  Society  Committee's  report  shows  what  was 
the  country's  position  with  regard  to  food  in  July,  1916,  as 
compared  with  the  prewar  situation.  The  report  states  that 
the  problem  is  partly  statistical,  partly  physiological,  involv- 
ing (i)  a  knowledge  of  quantities  of  foods  available  and  (2)  the 
determination  of  the  adequacy  of  the  supply  for  the  suste- 
nance of  the  nation,  the  latter  calculated  in  the  amounts  of 
protein,  fat  and  carbohydrates  contained  in  the  given  foods. 

Taking  the  average  for  five  years  preceding  the  war  (1909- 
1913),  the  quantities  (in  metric  tons)  of  food  materials  im- 
ported (net)  and  home  produced  were  as  follows: 

Cereals 4.865,000 

Meat 2,685.000 

Poultry,  eggs,  game,  rabbits 331,000 

Fish 848,400 

Dairy  products,  lard  and  margarin 5,231,800 

Fruit 1,271.000 

Vegetables 5.48a.ooo 

Sugar,  cocoa  and  chocolate •1,657,000 

•  The  Food  Supply  of  the  United  Kin^om.  A  report  drawn  by  a  committee  of 
the  Royal  Society  at  the  request  of  the  President  of  the  Board  of  Trade,  Cd.  8421 . 

'  R.  H.  Rew:  Food  Supplies  in  War  Time,  Oxford  Pamphlets,  1914,  p.  5. 


GREAT   BRITAIN 


57 


Generally  speaking,  a  woman  or  a  child  requires  less  food 
than  a  man  ,..    has  a  man  value  less  than  a  unit.    According 

Tn^VT    '•       ~'?^«"»°"  «f  a  population  of  men.  women 
and  children  into  units  or  "men"  reduces  the  total  number 

children     as  consumers  equal  77  units  or  "men."  the  quanti- 
ties  of  food  available  in  Great  Britain  during  1909-.913  were 

"^  57«  4009 

I^Ilv^'^^i^"'^'  """P^""  ^^^  ^^^^•■^^'y  ^'th  what  is  ac 
^ally  needed  for  proper  nutrition.  The  normal  requirements 
per  head  per  day  involve  the  use  of:  '^ments 

G^mZ,  r^"  Carbohydrates  Energy  Value 

Gramme.  G^mme.  Gramme,  Million^of  Clok 

**"  3091 

In  July.  ,916,  the  total  population  of  Great  Britain  was 
estimated  at  46.500.000.  including  fighting  forces  at  home 
and  abroad,  prisoners,  etc.     The  available  food  in  timHf 

naval  establishments  (4.000.000  men)  and  (2)  for  civilian^pu- 
lation  (31.800  000  men).  Such  a  distribution  of  food  o^he 
i^the?Iir^'''/r' J"  *'"'  °'  '^'913.  as  illustrated 

he^lS        mI f  ^  'J°*'  '^^'  °"  '^'  P'-^^'^'-  b^«i«  of  supply 
the  food  avaibb  e  for  the  civilian  population  would  have  b^n 

Jener^"  "'  *'  ""^"'^'  '^'  '"PP'^  ^'^  ^^  P^^*^'"  ^"d 

Protein  Fat  Carbohy.        Energy  Value 

drates  Millions  of 

Orammes  Calories 

180 
1 30 


•  •"••«:"■  rat 

Grammes     Grammes 


^"!f«n' ,40 

C'vil ,36 


500 

563 


4300 
3859 


According  to  the  findingsof  the  committee,  thesupplyof  food 
available  up  to  July  29.  1916.  provided  a  margin  o^aC  2^ 

per  cent  above  the  minimum  necessary  for  proper  nutrition. 

The  committee  adds  to  its  findings  the  very  pertinent  remark 


58  PKICE9  AND  PRICE  CONTROL  DURING  THE  WAR 

that  "while  the  supply  of  food  has  been  adequate  for  the 

support  of  the  population,  the  rise  in  prices  has  accentuated 

the  inequalities  of  distribution,  which  reduce  the  daily  ration 

of  many  below  the  level  of  efficiency." 

During  the  period  considered  by  the  committee  oversea 

supplies  of  the  principal  foodstuffs  had  been  on  the  whole 

well  maintained:' 

1914-15  1915-16 

Cwti.  Cwt». 

Wheat  and  flower 111,500,000  111,800,000 

Kice 10,100,000  8,300,000 

Suitar 35,800,000  32,000,000 

Beef 8,000,000  7,300,000 

Mutton 4,600,000  3,500,000 

Bacon   6,400,000  6,900,000 

Hami 1.300,000  1,400.000 

Butter 3,700,000  3.800,000 

Margarin i,7«».«>«»  a,6oo.ooo 

Cheete s.800,000  2,500,000 

In  the  five  years  before  the  war,  the  United  Kingdom  im- 
ported 64  per  cent  of  foodstuffs  consumed  there,  producing 
only  36  per  cent  at  home.' 

One  factor  is  often  overlooked,  and  this  is  the  effect  of  the 
war  on  the  number  of  consumers.  The  population  of  Great 
Britain,  instead  of  growing  as  it  did  before  the  war,  became 
stationary,  i.e.,  the  war  losses  have  been  balanced  by  the  gain 
in  births.' 

High  Freight  and  Insurance  Rates 

It  is  natural  that  in  a  country  which  like  Great  Britain 
depends  for  a  large  part  of  necessary  foodstuffs  and  raw 
materials  upon  foreign  markets,  availability  of  tonnage,  freight 
rates  and  costs  of  marine  insurance  should  be  considered  as 
important  factors  in  determining  the  price  of  commodities. 
When,  after  the  declaration  of  war,  prices  began  to  rise, 
many  people  attributed  the  increase  to  disorganization  of 
ocean  transportation  and  to  exc«^.dingly  high  freight  chaises. 

»H.  S.:  "Early  Phases  of  Food  Control,"  The  Edinburgh  Review,  January, 

« John  Hiiton:  "The  Foundation  of  Food  Policy,"  The  Edinburgh  Revi ■     July, 

»  R.  Henry  Rew:  "The  Prospects  of  the  World's  Food  Supplies  after  t.  ar," 
Journal  of  the  Royal  Statistical  Society,  January,  1918,  p.  55. 


GKEAT   BRITAIN  _- 

m!^Z  i''*'*  "!!  1"  '"'*.**'  conditions  affected  freight  rates 
may  be  formed  from  the  investigation  of  the  Departmental 

wheTand  7  "^"'^  '* '°""'  *  *'^*'  ^'''*-"-  '^^-^^  - 
compared  w.th  the  period  July  to  September.  ,9,6  The 
freight  rate  on  gram  from  New  York  was  ij.^d.  (28.4  cents) 
per  quarter  (.8  pounds)  in  the  first  period  and  Qs.  8d  ($r35 

ZTa     •       >f  »'"a  Wown  river)  was  9s.  lod.  ($^.,9)  per 
ton  during  the  first  period  and  1409.  6d.  ($34.19)  during  ^l 
second  period,  an  increase  of  1.329  per  cent  • 
fouZZ/"  <^°"""enced  ocean  freight  rates  per  ton  rose  as 

Endofi9l6    Endofi9,5    End  of  ,9,4   End  of  ,9,3 

River  Plate  to  U.  K.  .  .  ,V/l"  ^"T  ^"  '°"  P"  'o" 

Bombay  to  p.  p l*^i°  f°/»  45/o                „/o 

United  Sutei—                          •'  '  '"'•'  "">                ig/o 
Atlantic  Port*  to  L.  H. 

Atl^"c"portgtoU  K         '^^^  '^'^^  ^'°  30/0 

^"^"^ _Z4^  _79^  j^  7/,0 

"^"•^ '"/-»      "8/'     47/8      "i;;:: 

I  ififr?  '^^'"  ''■°'"  *''^  '"'^"  «^  '^'  ^'"^rican  consul  in 
Liverpool  compare  certain  rates  prevalent  before  the  war 

till'     ^Ji      "^  ^'^-^7:  River  Plate  to  United  Kingdom 
$4^39  and  $27.98;  Bombay  to  United  Kingdom.  $4.6^  a'd 
$57.17;  Calcutta  to  United  Kingdom,  $5.96  and  $66  89.' 
,«^  ?'^  ?u^  homeward  River  Plate  fluctuated  a  little,  being 
wh?n  VT  T''  ^"^  ^'^''^'■^^ '"  ^''^  United  Kingdom 

o^UPlZ^'T""^'  "r'  '^^"  *"  •^°^-  ^-"^  Buenos  Aires 
^o,^  tv  "*  ''♦^'-  ^'""^  "P-"^-^'-  ^°  Great  Britain.     In 

1914  this  voyage  was  valued  at  i8s.  6d.    Heavy  grains  from 

•Commerce  Reports.  Annual  Series  No.  ,9b.  November  i.  19,7. 


te 


raiCKS  AND  PRICB  CONTROL  DUKiNG  TUS  WAS 


Business  which  fixed  in  1914  from  Bombay  on  the  dead 
weight  basis  at  19s.  could  only  be  done  at  aoos.  at  the  begin> 
ning  of  1917,  and  later  the  figure  rose  to  3008.  with  400s, 
quoted  to  the  Mediterranean.' 

The  editor  of  the  Journal  of  the  Royal  Statistical  Society 
considers  that  the  rise  in  freights  was  brought  about  mainly 
by  the  action  of  the  British  Government  in  commandeering 
and  requisitioning  for  war  purposes  a  considerable  propor- 
tion of  the  British  merchant  marine.* 

To  this  cause,  which  obviously  shortened  the  amount  of 
British  shipping  available  for  mercantile  purposes,  may  be 
added  the  destruction  of  many  vessels  by  submarines,  the 
increased  cost  of  working  ships,  the  congestion  at  the  docks 
and  the  extra  large  profits  made  by  the  owners  of  liners  and 
of  tramps. 

Through  191 7  Great  Britain  experienced  a  gradually  in- 
creasing state  control  of  shipping.  The  extent  of  the  govern- 
ment's requirements  in  tonnage  was  indicated  by  Sir  L. 
Chiozza-Money  (Parliamentary  Secretary  to  tho  Ministry 
of  Shipping)  in  the  House  of  Common?  on  May  10,  when  he 
stated  that  of  the  total  tonnage  available  92  per  cent  had 
been  placed  at  the  disposal  of  the  Food  Controller,  the  War 
Office,  the  Admiralty  and  the  Ministry  of  Munitions.* 

Increased  freight  rates  do  not  apply  to  this  requisitioned 
tonnage,  as  it  has  been  taken  over  by  the  government  at 
prewar  rates  of  freight,  "although  since  the  commencement 
of  the  war  the  cost  of  repairs  has  trebled,  the  cost  of  marine 
insurance,  inclusive  of  war  risks,  and  also  the  cost  of  stores 
and  provisions,  have  increased  in  the  same  proportions."* 
The  government  paid  in  June,  191 7,  68.  6d.  ($1.58)  per  ton 
per  month  to  British  shipowners  under  requisitioned  condi- 
tions, while  neutral  tonnage  was  being  chartered  at  50s. 
($12.17)  per  ton  per  month.* 


«  Chamber  of  Commerce  Journal  Trade  Review,  January,  1918,  p.  3. 
»  Journal  of  the  Royal  Stalislical  Society,  March,  1917,  p.  294- 


»  Chamber  of  Commerce  Journal  Trade  Review,  January,  1918,  p. 
*  Industrial  Unrest  in  Great  Britain,  Bulletin  o(  the  U.  S.  Bi 


ureau  of  Labor 


Statistk-fi,  No.  237.  p.  181. 
>  Ibid.,  p.  181. 


ORBAT  BRITAIN 


6l 


It  «  exceeding  y  difficult  to  establish  the  lelationship  be- 
ween  the  nw  in  freight  rate,  and  the  increased  cost  of  good.. 
In  a  debate  in  the  House  of  Commons  on  August  23  and  3X 
I9i6.  Mr.  Win.ton  Churchill  attacked  shipowner,  wh"  ac: 
cording  to  him.  by  extorting  enormous  profits,  were  raising 
the  pnoe  of  commodities;  he  advocated  Rovernmental  control 

although  by  arrangement  with  the  Board  of  Trade  and  the 
shipowner,  of  the  country"  the  whole  of  the  refrigerating 
tonnage  employed  in  the  carriage  of  meat  to  Great  Britain 
was  fixed  at  a  rate  of  freight  which  did  not  exceed  the  pre- 
war  rates  more  than  J  of  a  penny  to  }d.  per  pound,  the  price, 
of  meat  have  risen  enormously."'     Mr.  Pretyman  gave  fig- 
ures which  showed  that  if  at  the  outbreak  of  the  war  the  4 
pound  loaf  was  sid.  and  in  August.  .916.  9d..  the  rise  in 
reights  represented  only  id.  out  of  3}d.  advance  in  the  price.' 
In  October.  1916,  Mr.  Runciman  pointed  out  that  less  than  a 
half  penny  out  of  the  4d.  or  5d.  rise  in  the  price  of  meat  went 
lor  higher  cost  of  carriage.' 

In  considering  the  causes  of  increased  meat  prices,  the 
Board  of  Trade  committee  reported  that  because  of  systematic 
shipping  arrangements  made  by  the  government,  freight 
rates  do  not  constitute  the  main  item  in  the  increased  cost  of 
imported  meat,  the  average  amount,  including  the  increase 
during  the  war.  being  not  more  than  id.  per  pound  The 
report  mentions  limitations  of  means  of  transport  as  one  of 
the  reasons  for  high  prices,  the  last  named  factor  including  the 
handling  of  cargoes  in  port  and  by  rail  and  the  frequent  conges- 
tion in  the  docks,  which  so  seriously  limited  the  working  power 
ot  ships  and  thus  reduced  amount  available  for  civilian  use  ' 

Most  of  the  food  is  brought  to  Great  Britain  by  British 
owned  steamers  at  the  requisitioned  rate  and  the  anomaly 
has  been  pointed  out  of  Argentina  wheat  not  having  been 
lowered  m  price,  though  shipped  to  British  Isles  at  blue  book 

1  t^  Eeonomist,  August  26,  1916,  p.  i>c 
'  The  Nation,  Octolwr  21.  1916 
^  '^Report  (interim)  of  the  Board  of  Trade  committee  on  price,.  Cd.  8358.  ,9,6. 


PRICES  AND   PRICE  CONTROL  DURING  THE  WAR 


rates.'  In  June,  1917,  it  was  authoritatively  stated  that 
freights  accounted  for  only  ]d.  (1.5  cents)  in  the  price  of  a 
4  pound  loaf  and  id.  (2  centn)  per  pound  in  meat.* 

It  is  obvious  from  the  above  that  one  must  accept  with  a 
great  deal  of  caution  the  contention  of  Sir  George  Paish  that 
one-half  of  the  rise  in  prices  in  191 5  and  1916  wa<«  due  to  rise  in 
freights,'  or  the  statement  of  the  editor  of  the  Journal  of  the 
Royal  Statistical  Society  that  the  rise  of  prices  in  1916  was  due, 
in  a  large  measure,  to  a  continuous  advance  in  freight  rates.* 

The  cost  of  insurance  against  war  risk  has  increased  con- 
siderably since  Germany  started  her  ruthless  submarine  cam- 
paign. Lloyds  during  rli'-  first  part  of  1917  demanded  35 
per  cent  for  war  risk  insurance  un  a  three  months  voyage. 
"The  effect  of  a  25  per  cent  war  risk  insurance  on  a  cargo 
worth  £50,000  carried  in  a  ship  worth  £150,000,  a  total  of 
£200,000  ($973300),  with  superadded  cost  of  insurance, 
£50,000  ($243,325)  is  to  double  the  costs  of  the  cargo,"*  No 
actual  premiums  are  paid  by  the  government  for  insuring  its 
requisitioned  shipping,  but  it  has  to  see  to  it  that  its  risks  are 
covered  and  its  losses  recouped.  In  the  opinion  of  the  com- 
missioners for  Wales  appointed  to  inquire  into  the  causes  of 
industrial  unrest,  the  cost  of  war  risk  insurance,  especially 
for  food  supplies,  ought  not  to  be  borne  by  the  cargo,  but 
should  be  regarded  as  general  war  expenditure  and  be  met 
accordingly.' 

Taxation 

Taxation  played  some  part  in  the  increase  of  prices.  This 
has  been  particularly  true  in  the  case  of  indirect  taxes,  such 
as  license  and  customs  duties.  Thus  of  the  increase  of  87  per 
cent  noted  on  January  i,  191 7,  above  the  prices  of  July,  1914, 
about  6  per  cent  was  due  to  additional  taxation  on  tea  and 
sugar.'     On  the  other  hand,  taxation  tended  to  lower  prices 

'  Coramcri-e  Rcfiorts,  Annual  Series,  No.  19I),  November  I,  1917. 

'  Bulletin  of  the  U.  S.  Bureau  of  LatK<r  Statistics,  No.  2.^7,  p.  181. 

'  H.  S.  Foxwell:  "  Ways  and  Means,"  Thf  Economic  Journal,  March,  1916,  p.  18. 

*  Journal  of  the  Royal  .Statistical  Socifty,  March,  1917,  p.  J94. 

»  Bulletin  of  the  U.  S.  Bureau  of  Labor  Statistiis,  No.  237,  p.  181. 

'Ibid. .p.  18!. 

'  Commerce  Reports,  October  12.  1917,  p.  6. 


G«EAT   BRITAIN 


^i 


in  .o  far  as  it  acted  a»  a  check  on  consumption.  By  n.«,rtinir 
most  y  to  loan,  and  not  to  taxation,  the  government  ZmTo 
exerr.«.  its  great  weapon  of  finance  in  this  direction  "By 
rationing  the  buying  power  of  the  citizen  by  drantic  taxation! 
the  Chance  lor  might  have  greatly  r«Juc«l  the  nc^ed  f"; 
control  and  its  consequent  friction."* 

Money  taken  in  taxation  leads  to  personal  retrenchment 
Money  taken  in  loans  permits  the  p<.pulation  to  sp^nd  more 

e7nmr„::i7''=  *.'"  T""'"'^  '^"'«"-  ^'  -multaZ  7- 
rrorpriiT"'  '"''  "'  ''"'''''"'  ■''"^P''^"'  '-"«''  "'-"^  a 

wal'lhetnalcf^'!'^'^^  "'.''T  '"  """''''  ''"'''  '^^  ^-'""""^ 
was  the  financial  policy  of  the  goM-rnment.  which  has  relied 

too  much  on  loans-larKcIy  credit  loans-and  t.n,  litt  e  ^ 

taxation  design.l  to  check  unnecessary  consumpti^in  " 

inrn^         xvu-^'  "'""''"  "'"''*  ^'  ''f'''''"'  "«»  ""ly  to  large 
ncomes.    Whik-  ,„crca..  d  mcn.v  i„  the  hands  of  the  weahhy 

^rtVf"thei7-'''""^'  ''''''  '''"■^"^'  '''  '---•  ^"^  "^or 
part  of  their  incomes  h  ..u.ste.l  ui  "capital  goods."    What 

•s  needed,  according  to  IV<,fcssor  (  annan.  is  a  tax  on  all  in- 
comes which  give  a  margin  ov<t  absolutely  necessary  expendi- 
tures;  only  such  a  taxation  will  act  as  a  factor  reducfn^  the 
price  of  necessaries.'  "^uuting  me 

Hoarding  by  the  Consumer 

tinier'"  ^'"°""'  °^  *'°*'^'"e  '^y  »he  consumer  is  mr.- 
tioned  by  some  as  an  additional  cause  of  high  prices  •    I '  • 
ever  great  may  have  been  the  effect  of  this  cause  during  a.' 
panic  which  occurred  in  the  first  two  weeks  of  the  wa     an  - 
however  spectacular  may  have  be.  n  some  casc-s  of  hoa  d  ng 

suspects    hoarding   by  consumers  has  hardly  exercised  any 
appreciable  influence  in  raising  prices. 

'  The  Economist,  February  i6,  iqi8   d  2»fi 


ti. 


fef. 


CHAPTER  IV 
Profiteering 

In  discussing  the  dangers  of  governmental  regulation  of 
food,  the  Spectator^  asserted  that  it  was  very  doubtful 
whether  there  would  have  been  any  political  outcry  with 
regard  to  high  prices  but  for  the  theory  that  the  rise  was 
due  to  the  wicked  machinations  of  the  "profiteer." 

The  journal  attacks  the  halfpenny  press  for  pandering  to 
the  prejudice  of  its  readers  by  continually  suggesting  that  high 
food  prices  are  the  result  of  combinations  and  speculations  of 
the  profiteers,  the  Labor  members  in  Parliament  and  labor 
agitators  outside  of  it  acting  in  a  similar  spirit.*  It  deplores 
the  whole  outcry  about  food  prices  as  one  of  the  worst  examples 
of  the  way  in  which  interested  persons  will  lend  themselves 
to  a  popular  agitation  without  the  least  regard  to  the  real  facts. 

If,  according  to  this  periodical,  one-tenth  of  the  public 
money  that  has  been  devoted  to  the  war  savings  campaign 
and  the  food  economy  campaign  had  been  spent  upon  a  cam- 
paign to  teach  the  mass  of  the  people  the  elementary  laws 
governing  the  movement  of  prices,  a  great  deal  of  the  present 
social  bitterness  would  have  been  entirely  avoided.* 

The  Statist  does  not  consider  profiteering  a  weighty  factor 
in  raising  prices;  it  is  rather  a  symptom  of  prevailing  condi- 
tions. Because  of  shortage  in  the  world's  food  supplies  and 
the  inflated  condition  of  the  currency,  high  prices  are  inevi- 
table, and  "when  there  is  a  tendency  for  prices  to  rise  it  is 
natural  that  speculators  should  take  advantage  of  the  tend- 
ency and  force  the  rise  higher  and  quicker  than  it  otherwise 
would  go."* 

While  admitting  that  to  some  extent  strategies  of  unscrupu- 

'  The  Spectator,  August  4,  1917,  p.  109. 

•  Ibid.,  October  21,  1916,  p.  465. 
'  Ibid.,  July  j8.  1917,  p.  79. 

*  The  Statist,  February  6,  1915,  p.  206. 

64 


li  ■ 


GKEAT  BRITAIN 


«s 


lous  profit  seekers  may  have  been  active  during  the  war.  the 
Saturday  Review  considers  that  charges  made  against  them  are 
unaccompanmd  by  evidence.  "Federated  scoundrels  can 
not  have  ruled  over  all  markets,  yet  the  price  of  all  commodi- 
ties has  gone  up  and  up."' 

Professor  Cannan's  opinion  is  similar  to  those  mentioned 
above.  He  speaks  of  the  disappointment  of  the  working  men 
who  have  now  more  monay  to  spend  and  who  in  spending 
It  raise  prices  against  themselves.  Notwithstanding  higher 
wages,  the  working  men  are  not  as  much  better  oflF  as  they 
expected  and  some  of  them  are  even  worse  off  than  they  were 
rjJ,  t^  ^"^  naturally  disappointed  and  complain  of  being 
exploited  by  profiteers.  Newspapers  see  good  copy.  Articles 
appear  explaining  that  the  rise  of  prices  is  due  solely  to  the 
machinations  "of  such  or  such  a  ring  "« 

According  to  Mr  Shadwell.  the  abnormal  state  of  the  mar- 
ket affords  unusual  opportunities  and  temptations  to  uns.Tu- 
pulous  persons.  He  favors  a  watchful  lookout  for  malpractices 
which  may  aggravate  existing  conditions,  but  expresses  the 
view  that  "to  regard  such  malpractices  as  the  main  cause  of 
high  pnces  is  to  misconceive  the  whole  problem."'  Accord- 
ing to  him,  popular  discontent  against  high  prices  has  been 
excited  not  so  much  by  the  rise  itself  as  by  the  belief,  assidu- 
ously inculcated  that  it  is  caused  by  manipulation  of  the 
TcontroP  ^^'"^  prevented  by  summary  measures 

That  high  profits  should  be  regarded  rather  as  a  result  than 
a  cause  of  high  prices  is  maintained  by  the  Nation:  "The 
increased  supply  of  money  which  the  government  by  its  buy- 
ing pumps  mto  the  business  system  operates  everywhere  to 
set  more  purchasing  power  in  action.  ...  The  higher 
prices  thus  generated  must  express  themselves  in  higher 
profits  or  higher  wages,  or  in  higher  prices  for  the  tools 

tp'^f^J'^'^lS"^-  SeEtember  2.  19,6.  p.  2,7. 
p.  4!^^,^*""^"=     R«P°«  on  {^«Kl  Prices,"  The'kconlmic  Journal,  December,  ,9,6. 

A}i:A!^ttSi7j%''"''''  ""''  ^'^  ^"""'y-"  ^^^  ^'»"-'"*  Cenlury  and 
*  Ibid,  p.  727. 


06 


PRICES   AND  PRICE   CONTROL  DURING  THE  WAR 


and  materials  used  in  the  various  processes  of  production." 
The  journal  admits  that  where  there  is  artificial  or  contrived 
scarcity  as  in  shipping,  a  bigger  slice  is  taken  as  profits.' 

As  to  the  views  of  statesmen,  Mr.  McKenna,  in  assigning 
the  general  rise  in  prices  as  one  of  the  foremost  causes  of 
labor  unrest,  remarked  that  the  main  reason  for  that  rise 
was  not  profiteering  but  "inflation,"'  and  Mr.  Runciman,  in 
speaking  in  the  House  of  Commons  in  August,  1917,  declared 
that  the  chief  cause  of  the  increase  in  prices  was  not  to  be 
found  among  profiteers — carriers  or  producers.' 

The  Board  of  Trade  Prices  Committee  conducted  a  careful 
investigation  of  specific  charges  of  profiteering;  the  only 
positive  results  which  it  obtained  and  which  are  embodied  in 
its  final  report  were  as  follows:*  "In  the  autumn  of  1916 
prices  for  potatoes  were  demanded  by  dealers  very  greatly 
in  excess  of  cost  of  production  or  cost  of  purchase  from 
farmers.  .  .  .  There  was  a  real  scarcity  and  the  rush  of 
retailers  ran  the  price  up,  as  with  fish.  In  the  spring  of  1916 
one  tea  broker  was  guilty  of  speculative  overbuying;  this  had 
an  influence  in  the  direction  of  raising  prices." 

The  committee  was  appointed  on  June  17,  1916,  by  the 
President  of  the  Board  of  Trade  to  report  on  the  supply  and 
prices  of  foods.  The  first  report,  a  preliminary  one  on  milk, 
meat  and  bacon,  was  made  on  September  22,  1916.  The 
second  report,  on  bread,  flour  and  wheat,  and  the  third,  on 
sugar,  tea  and  potatoes,  were  presented  in  November  and 
December,  respectively,  but  they  were  not  published  till  the 
spring  of  191 7. 

With  regard  to  the  rise  in  the  price  of  milk,  the  committee 
found  that,  while  combination  among  farmers  has  helped 
to  secure  the  higher  prices,  it  was  mainly  an  increase  in  de- 
mand and  an  increased  cost  of  production  that  have  been 
responsible  for  the  rise.  In  particular  the  increased  demand 
of  the  producers  of  margarin,  tinned  milk  and  milk  chocolate, 

'  The  Nation,  October  21,  1916. 

»  The  Economist,  July  28,  11^17,  p.  ill. 

"  The  Liberal  Magatine.  .August.  1917,  p.  363. 

*  The  Sineteenth  Century,  .April,  1917,  pp.  742-743. 


GREAT   BRITAIN  g_ 

S^'tk''^  '^^'  °i  '^'  ^''^^P'^^'^'  ^^'  h^'P^d  to  force  up 
pnces.    The  mcreased  price  of  cheese  ha.  had  a  similar  effect 

The  gains  made  through  high  war  prices  have  gone  accoTd 
•ng  to  the  com^Utee-s  report,  chiefly  to  the  pnWy^t 
cers.     That  retail  dairymg  in  London  has  of  late  years  been 

indicated  by  the  evidence  which  has  been  produced  to  the 
commutee  by  a  number  of  the  principal  firms  in  The  trade 
On  the  other  hand  the  businessof  wholesale  distribution  must 
be  held  to  have  prospered.     A  prospectus  issued  by  uS 
Da,nes.  Ltd.,  formed  in  1915  to  combine  a  number  of   vhoS 
sale  concerns,  announced  that  for  the  year  ending  Aoriir 
1915.  their  combined  profits,  after  providing  for  all  esVab  Lh 
ment  charges,  depreciation,  directors'  remuneradl     nt !  t" 
on  del,entures  and  the  dividend  of  6  per  cent  on  the  i  sued 
preference  shares  of  the  company,  "would  have  I  Jn  more 
than  sufficient  to  pay  a  dividend  of  ,4  per  cent  on  its  isTued 
ordinary  shares."     It  should  be  noted,  however,  that  thes^ 
profits  are  asserted  by  the  company  to  have  l^-en    a  eelv 
made  m  the  manufacture  of  dairy  ut/nsils  and  of'lieS 
milk,  cheese  and  cream,  and  it  is  even  claimed   tha!^. 
largest  of  the  combined  companies  lost  hea^.y  on  UsU^ 

U^ZT  h'^'Z'"'""'  ^^  '''''-^^  nLthrentS 
mirnr'iclsh.    ,1''''"''' .?P""'"  ''^"*  '^'  "^  '"  wholesalers' 

Costs  of  distribution  in  London  and  large  towns  generallv 

Jarmer.    In   provincial   towns   before  the   war   the   cost   of 
delivery   was   reckoned   at  alx,ut   4jd.   to   6d.   per  gallon 
In  the  case  of  certain   farmers'  cooperative  societies    who 

SXd"tt  T'  i  'T-''  '''  clsumer.^  r:LL^" 

^alleged  to  have  already,  in  some  areas,  effected  a  con- 

^erable   reduction    in    charges.     It    is   calculated   by  one 

farmers  milk  supply  association,  which  sold   in  a  small  town 

.9'.6"pp.'T;-r  "'  """^^  ^"'""  ''°"'  °' '"''"'  ^«""'"'«-  -  Prices.  Cd.  8358. 


61 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


in  Lancashire  over  £4,500  worth  of  milk  in  191 5,  that  the  cost 
of  distribution  from  the  depot  to  the  consumer  is  nearly  4d. 
per  gallon.  Even  on  this  basis,  however,  it  hardly  appears 
that  the  higher  charge  for  town  distribution  is  exorbitant,  the 
process  there  consisting  in  a  multitude  of  deliveries,  involvii^ 
relatively  more  labor.  Under  present  conditions,  the  average 
cost  in  London  must  apparently  be  reckoned  at  at  least  6d. 
per  gallon  and  dairymen  contend  that  it  is  considerably  more. 
It  has  been  reckoned  that  London  dairymen  could  still  afford 
to  sell  at  id.  per  quart  less  over  the  counter  than  is  charged 
for  milk  delivered  to  the  customer.  But  by  far  the  greater 
amount  of  milk  is  sold  by  delivery;  and,  except  in  the  poorer 
districts,  there  is  no  likelihood  that  a  sufficient  number  of 
customers  to  make  a  business  pay  would  consent  to  go  or 
send  for  their  milk  in  the  early  morning. 

Concerning  profits  on  meat,  the  committee  has  the  follow- 
ing to  say : 

It  may  be  taken  as  certain  that  considerably  increased 
profits  have  been  made  during  the  war  by  cattle  breeders  in 
the  United  Kingdom  and  in  foreign  countries,  especially  in 
South  America.  This  is  the  first  main  item  in  the  increase  of 
price;  and  as  regards  the  cattle  breeders  of  the  United  King- 
dom it  is  partly  offset  by  the  increased  cost  of  labor  and  of 
feeding  stuffs.  An  increased  amount  of  capital  being  thus 
involved  in  the  handling  of  the  product  at  each  stage,  it  may 
be  assumed  that  additional  profits  have  been  reaped  at  some 
of  them. 

So  much  has  been  said  of  the  large  profits  of  meat  trusts  and  other  meat  dealers 
that  the  committee  have  been  at  special  pains  to  investigate  in  that  direction. 
One  of  the  two  British  companies  (in  Argentina)  has  paid  a  lai  per  cent  dividend 
for  1915,  besides  putting  £100,000  to  reserve.  In  1914  that  company  had  paid  no 
dividend.  .  .  .  The  other  British  company  showed  a  total  profit  of  over 
£143,000  in  1915  aa  compared  with  less  than  £36,000  in  1914,  and  a  loss  in  1913. 
Details  of  the  dividends  of  the  "  British  American"  meat  firms,  which  are 
private  companies,  are  not  available  to  the  committee,  but  it  was  admitted  by  a 
representative  of  one  of  these  companies  that  profits  had  been  made  in  1914-15  after 
two  years  of  loss  in  1913-13.  On  the  whole,  no  sui  h  profiu  appear  to  have  been 
made  in  the  meat  importing  trade  as  are  recorded  in  some  of  the  leading  "war 
industries."     .     .     .     The  substantial  cause  of  increased  profits  is  rather  the  short- 


GREAT   BRITAIN  .  ^ 

Although  bacon  prices  have  risen  considerably  less  than 
tw^n  l7  "  ""'"*  ^"^"*  *^  P^--  ^^"*  «"  the  average  as  t" 
SivJv  L'"'"'  -'"^  ^''*^'"'^^'    '916).  there  has  t^n 

to  tne  fact  that  in  the  eariy  part  of  the  suZ^a  ^elt! 
t.ty  o  American  bacon  was  put  in  cold  storage  in  IfverZ 

Pres^  opin-onfas  to  tro^lluro^-.^iJ  ^s'' i^^^^^^^^^ 

s:.;^h=^--^^-.-^^ 

tion  of  prices  has  been  so  produced.  *' 

Although  a  large  quantity  of  American  bacon  was  out  in 
cold  .  orage  .n  1916.  it  was  part  of  an  unusually  Lree' 
^rtatron.  and  cold  storing  was  practically  a  neceLanf  stet 
Rehab  e  evidence  has  been  given  to  the  effect  tha  StS 
of  American  bacon  have  been  sold  in  England  durin J  thf 
summer  at  an  actual  loss  to  the  American  packer.'        ^ 
tJl  fr        '^  u^^'^'  Commissioners  of  Inquiry  into  Indus- 
na   Unrest  who  tried  to  find  out  "who  and  what  cauLs  are 
really  responsible  for  the  great  increase  in  the  coTtTf  the 
irbS'r      '^'    -    "~"   retailers!  ThiUwnt 

at"cJf:t-ri:ir;^^::;rbr^r;.1"^  ^^^" 

took  Canadian  wheat,  marketed  at  VVinn  peg  at  Irim       h 
It  was  delivered  in  London  at  ;.s.  a  Z^^      ^^  ^aVw:: 
9id.  the  4-pound  loaf.    The  result  was  as  follows : 

Pp'-'tT  "-"^  °'  «•"  ^--  Britain  Board  of  Trade  Committee  on  Prices 

*  Ibid.,  p.  13  ' 

^•J.  Cannan:  -Industrial  Unrest."  TKe  Economic  Journal.  December.   .,.7. 


TO  PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 

Per  Quarter  Per  Loaf 

Price  obuined  by  farmer S"*-  5^- 

Lake  and  rail  transport  and  elevator  charge* 6i. 

Commiiaion  to  dealers,  brokers  and  shippers is.  3d. 

Insurance  to  London i».  3d.  . 

Freight «M-  |»«1- 

London  commissions  &  exchange is.  3d.  t"- 

Cost— 2 id.  per  loaf  to  London,  leaving  aid.  to  meet  all  expenses  aker  arrival 
(this  includes  transportation  to  the  mill,  grinding,  transporUtion  to  the  baker, 
baking,  delivery  and  the  "middlemen.")' 

From  the  preceding  it  is  obvious  that  if  "profiteering" 
means  the  holding  up  of  supplies  for  the  purpose  of  forcing 
up  prices,  if  it  stands  for  plunging  into  this  or  that  market 
in  order  to  obtain  speculative  gains  out  of  national  needs,  then, 
all  the  mob  oratory  and  public  agitation  notwithstanding, 
there  has  been  very  little  profiteering  in  England.  The  subject 
has  been  carefully  investigated  by  competent  parlies  and 
hardly,  if  ever,  were  there  found  evidences  of  any  material 
amount  of  pure  speculation.  "  It  may  have  been  practised  lo- 
cally and  in  a  small  way,  but  even  that  has  not  been  proved." 

If  on  the  other  hand  "profiteering"  means  the  securing  in 
the  ordinary  course  of  business  of  a  margin  of  profit  on  the 
goods  offered  for  sale,  if  profiteering  it,  4uivalent  to  taking 
advantage  of  market  conditions  to  make  money  without 
any  illegitimate  maneuvering,  then  no  doubt  there  has  been  a 
great  deal  of  so-called  profiteering,  for  a  great  deal  of  money 
has  been  made.'  But,  as  has  been  asked,  "will  those  who 
denounce  profiteering  be  prepared  to  compensate  the  profit- 
eer when  the  market  turns  against  him  and  he  suffers  a  loss?"' 
And  if  in  the  case  of  the  small  shopkeeper,  the  food  dealer,  it 
were  possible  to  get  rid  of  "profiteering"  by  fixing  prices  on 
the  basis  of  "prewar  profits,"  would  this  be  just?  Why 
should  the  retail  dealer  be  restricted  to  prewar  profits,  while 
the  wage  earners  claim  and  receive  special  wages?  Has  not 
his  cost  of  living  gone  up?' 

Some  idea  of  the  rise  in  profits  since  the  beginning  of  the 
war  may  be  gained  from  the  returns  to  the  excess  profits 

"Shadwell,  cp.  cit.,  p.  743. 
'Ibid. 

•  The  Quarterly  Rrvtew,  July,  1917.  P-  49- 

*  The  Spectator,  August  4,  1917,  p.  no. 


GREAT   BRITAIN 

tax  and  the  income  tax     In  w«.    •  " 

(with  supertax)  yielded' 4? ^t^T"  ""^P^^P^^^V  tax 
Excess  profits  duty,  nil  in  lo,?^       '      .  '^'^  £205.000.000. 
While  admitting  that'lK^e  cS  ^ffi'l  '^'^'^'OOO- 
culations  of  the  rise  in  profits-as    h  ^"^""'^'^^^  '"  '^^  cal- 
any  Capital  Gaze}te~ProLZK^l      "'^  ^""^  "'^  '^^^''^^  of 
that  there  can  be  no  doubt  ^to^heJ;""  T''''''''  *''^  ^'■"^^ 
A  certain  amount  of  Ugh    o„  1  ^^^'*'?^^  ^^"^^•"al  rise.  ■ 
profiteering  is  shed  by  the  invesl.r'"^:'  ''^  ^'^^'^  ^"d 
'nto  the  earnings  of  joLs'o^runir.u"'  °^  '^'  ^""'^"^ 

edlyrepresentonlyaU^  So?S  h"^'=  '''^^  ""^°"b^- 
of  the  country,  and  man^ToTn,  /t    u    "^"'"'^  ^"^  ^°'"'"erce 

eluded  in  the  Econ^iZ  TmZ^  T'^"^^  '''  "^^  in- 
takes presented  by  this  ^riXaUre  iu'  ""'"*''^'^-  '^- 
repay  a  careful  study       P^""^'^^'  ^^^  iHummating  and  will 

inlh:sr- ;  in^^^f,  sr;  ^^- — ^^--d 

to  £66,926,983  or  3.2  Lr  «nt     Th      •"  ^^''^'7^^  >"  ,914 
:;f--e^rts^apia^^^^^ 

the'So"us°yfan ''rhfa^ge'^^^^  ''  -m'partTS 

was  £93.000  against  £7..i™n ^'^tS^^!?'"''^""  '"  '''' 

If  one  compares  the  m.m™,        r  £"6.000  m  1914. 

ended  June  30.  1917   wjTh?  "^  T  P''°'^*^  ^^^  '^e  year 
decline  in  the  l^erceniage  Lcrtas^T'"!  ''''■  °"^  ^"ds  a 
^70,773.703  to  £82,o65^9ror To  1^^'^=  f'^^y  ™«e  from 
per  cent  as  they  did  in  the  calen^L '^!'  ''"'"  '"^'"^^  °^  ^^^ 
due  not  to  a  falling  off  in  ea™  „"  !1  ^''k  '^'^"^     '^'''^  ^as 
'n  1916  uncertainties  a    to  TZnTT  ^"Z  *°  ^^"  ^-^^^  ^^at 
taxation  have  to  a  large  extenTr  '    ,"'  '"'  "''"^^  P^Ats 
companies  which  a  yeaTagomade^'"     '"'f  "P'  ^"^  '"-"V 
jH^time  <^educted^heTmr  l^Sr:tX?-^i 

reclJd  rsTfu^,i;Xrtr;°^  ^^^  -'-^-  -- 1917 

,  ■/,S.  Nicho,.„:  ..Stat.lu  P'-^P^"-"-^^  "'-  of  profits' 

'  '  '■  p-  '• 


.flBl 


7t  PBICES  AND  P«ICE  CONTROL  DURING  THE  WAR 

The  increase  was  from  £82,537.238  to  £90.760,604  or  only 

lopercent.'  ,    .     p 

The  following  tables  summarize  the  results  of  the  Econo- 
mist's quarterly  investigations  since  January  I,  1914: 

S^n^'"  No.  of  1914  191S         lnc«..e  D«cr.a.c 

Quarter  Ended      Companiet  £«*'£% 

March  II    a93  aojgo.jSo  I9.799.aa6  99«.o54     4* 

Ju^o^.......  »85  a3.666.65»  ".375.0+  1.J91.603    54 

ScDtemberw 143  10,649,01410,707,02s  110.5 

oSimbSr  31    .  . .  a68  i4.oa8,7t*o  ■4.045.683    iTW  1  3 

938       69.134.7a6  66.9*6.983  a.«)7.743    3  a 

Reports  Publiihed  in  No.  of  i„rn.aie 

Quartei  Ended  Companie.      1^15  «^>6  ^  % 

March  u    »86  20,047,736  a3.536.746  3489.010  174 

jin"5o       .      311  a3.791.858  33.9a4.70a  io,l3a,844  4*6 

OmberM  "39  io,439.07a  13.358.836  ».9I9.764  a7  9 

ffiSter  31 1^  ia.95».376  15.767.539  a,8i6,i63  ai.8 

93a         67,330,043    86,587.833    19.357.781    a8.6 

Report!  Published  in  No.  of  inrreMs 

Quarter  Ended  Companies       19^16  i|i7  £  % 

March  u                 a53  ai.073.682  33.^16,670  3.542.988  13. o 

wV  330  a6.309.573  a9.3a2,747  3.oi.3,i74  "4 

&ber3o::: 337  '7.477.ooa  .8,360,507  783.505  45 

D^ember  30 380  17.676.981  19.560.680  1.883.699 

i,aoo         8a,537.a38    90,760.604      8,333,366    10.0 

There  are  many  instances  of  exceptionally  large  profits 
made  by  individual  industrial  concerns;  thus  thirteen  cotton 
spinning  companies  in  Lancashire  have  made  during  the  last 
quarter  of  1917  and  the  first  quarter  of  1918,  £95.287.  The 
share  capital  of  these  concerns  amounts  to  £669.r,9i,  v/ith 
loans  of  £273,197-  After  allowing  for  depreciation  and 
interest  on  loans,  the  profit  on  share  capital  works  out  at 
over  45  per  cent  per  annum.' 

The  profits  of  Courtauld's,  Limited,  silk  and  artificial  silk 
yarn  manufacturers,  rose  from  £757."0  in  1915.  to  £1.099,- 

>  Tkr  Economist,  January  6,  1917,  p.  7. 
» Ibid.,  April  13,  I9«8.  p.  599- 


GREAT   BRITAIN 


73 


The  twelve  boot  and  shoe  manufacturing  comoanies  whn-. 
h  is  difficult  to  offer  precise  fieure*  wifh  ^      ^ 

on  .L^kr'fThJ  ""'  *"•  ■";""">»  ""^  "Pi'-I  « i"^ 
on  me  Docks  of  Ihe  company,  white  n  the  case  of  anoHi.r  ™ 

eTh"  rrj;'" ""  "'T  ^"'''-  p'ic^  -  ar  "4  0^ 

each,  the  profit  amounted  to  £1 ,3oo,ooo.'  ^ 

'".f"™'  '''°"'  """  «'«-y  donbled  their  profits 

Workington   tron  and  Steel"  profits  were  f,,»c -.„  • 
.9.^.6^an  exc^s  over  the  firm's  prnfit!  in  ," u^feq^l  I" 
pSsleref  '1T„""'^  "'"'"■■^''  ''"""^"'  ^-icTaSn^ 

i  Ji^^"''T''  ^^^'■'^''  9.  «9l8,  p.  423. 
I  JM.,  March  30,  191H.  "^ 


p.  368. 


74  niCES  AND  rtlCE  control   PIKING  THE  WAt 

earning*  from  carrying  freight,  from  £853.374  in  1913  to 
£1,003,553  in  »9«4.  £1.347  357  »«  '9i5  and  £3,339.752  >« 
1916.'  Aa  to  dividends  on  tramp  steanurs,  if  the  retumi  on 
Mr.  Bonar  Law's  investment  in  single  ship  cargo  companies 
are  indicative  of  conditions  pre\ailing  in  tramp  traffic  in 
general,  the  possession  of  tramps  was  certainly  a  paying  propo- 
sition. On  £8,110  invested  by  Nir,  Bonar  Law  he  nreived, 
after  excess  profit.s  tax  had  been  paid,  £3,624  in  iyi5  and 
£3,847  in  1916;  £7,471  on  £8,ni)  in  two  years.' 

A  study  of  the  profits  of  Lotnl<  i  department  stores  is  of 
particular  interest,  as  it  is  indicat*  e  of  the  large  mia»ure  of 
general  prosperity  which  is  being  enjoyed  by  the  population 
of  the  metropolis.  In  many  instances  an  increase  in  the 
business  of  the  stores  is  limited  only  by  thi-  depletion  of  staffs 
and  by  the  inability  to  obtain  new  supplies. 

The  net  profits  of  the  London  stores  during  the  last  five 
years  were  as  follows:' 

Company  i<#i3  1914  «9I5  I9i6  I917 

£  £  £  £  I 

Army  ami  Navy  193.739  "6.909  196,534  »'0'°97  141366 

Civil  Sfrvke  Supply  44.9"  39.03«  43,39«  4».363  557" 

D.  H.  Evani 69.9*3  44.03°  4M3»  59.oo5  62.318 

DickinsAJone» 60,406  43.188  a6,7aj  50,788  66,105 

Frederick  Oorringe  33.a"  3l.ao5  3a."7  39.543  J9'99» 

Harrod'i J95.i8«  309.M7  ao».884  235.046  a8j.a93 

{ay.,                     40,857  i8,o6l  IJ.JM  15.197  «5.9«7 

ohn  Barker 63,907  76.066  63.141  66.001  85.884 

.iberty&Co 6i,534  30.37a  I3.J57  37.787  46.780 

Maple  &  Co 106,930  I33.4<M  ^  1 17.367  158.051  «540l 

Mapping  Webb 54.«o  25,639  Dr. 21,049  30,380  46.780 

Seirndgci m.3'X<  1 15.831  131.596  206.962  240,832 

Spencer,  Turner 37.«94  30,290  .M,873  56,623  .55.675 

Swan  &  Edgar 16,948  6,997  6.593  34.021  39.365 

ThomafWalli. 23.118  20,660  21,432  30,656  33.a4« 

William  Whiteley 70,63a  59.545  55.481  66,823  77.745 

1.385.050      1,210,353    1,001,031     1.347.343    1.706.655 

The  net  profits  of  the  above  companies  were  in  191 7 
£359,312  higher  than  in  1916,  and  £321,605  higher  than  in  the 
last  full  yer\r  of  peace.    From  the  nature  of  the  goods  sold  it  is 

>  Tk'  Econcmist,  April  21,  1917.  p.  692. 

•  /friu.,  July  7,  1917.  P-  «o- 

•  Ibid.,  April  ao,  1918,  p.  633. 


C«tAT  MtTAm 


75 


♦k:.   •  .  '  "*  London  stores  have  succeedpH  in 

th...  .n  many  instances  even  increasing  their  tu^ov^^,^; 
branch  shop  companies  have  not  fared  so  welaT?hrm  T 

dW  n?.   T"^  '"'"P^"'^''  *''*'*^  •«  °">y  «ne  conc^n  which 
d.d  not  declare  any  dividend,  between  1914  and  Zl    TH. 

profits  rose  again  to  £50.442  i^  19,77  "'""'"'  "** 

i  f^M^r"'?"''  J""'  9. 1917.  p.  1061. 

«7A^^f'M   ''"•'9'7.P-804. 


MKIOCOPr   nSOWTION   TBT  CHART 

(ANSI  and  ISO  TEST  CHART  No.  2) 


y. 

tn  |££ 

■  22 

1^13. 

?l^       1 

[20 

1 

il 


1.8 


1.6 


^  /APPLIED  IIVHGE    Inc 

:^^  1653  East  Main  Street 

BT^  Rocheitef.  N««  Yorh         1*609       USA 

^=  (716)   482 -0300 -Phone 

^S  (716)  288  -  %»a9  -  F<]« 


76  PRICES  AND   PRICE   CONTROL   DURING   THE  WAR 

The  changes  in  the  amount  of  profits  made  by  the  branch 
companies  since  191 3  were  as  follows: 

Net  Profit 

1913  1914  I9«5  I9>6  "9'7 

£  £  £  £  £ 

Chas.  Baker  &  Co 17.634  ".749  17.488  15.967  '5.349 

Eastman's 72.964  47.225  4i.«36  32.588  60,441 

Freeman,  Hardy  &  Willis         90.330  97.338  103.104  118,006 

Fuller's 13.475  5.653  8,978  8,70a  12,501 

Home  and  Colonial...        179.486  225.828  251.657  256,877  226,156 

Hope  Brothers 41.553  35.122  27,261  '51.780  58.171 

International  Tea  Stores         99,000  132,733  163.874  109.619  140.887 

J.  Sears  &  Co 55.312  61.634  75,679  65.321 

Maynard's 10,716  12,202  13,733  26,512  43.322 

Maypole  Dairy 48i.555  488.026  528,275  462.751  736.354 

Welford'sSurreyDairies         20,417  19.724  22,088  i7.47o 

•  Eighteen  months. 

These  profits  have  permitted  them  to  declare  the  following 
dividends: 

Dividends 
1913    1914    1915    1916    1917 

%  %  %  %  % 

Chas.  Baker  &  Co 6J  3  7i            ?  8 

Eastman's 4  "»'  "",  "'•  5 

Freeman,  Hardy  &  Willis 15,  I5  '71  I7i 

Fuller's I7i  10  7i            71  10 

Home  &  Colonial 20  25  30  30  30 

Hope  Brothers 6  5  4              6  8 

International  Tea  Stores 8  9  10             7  10 

J.  Sears  &  Co 12J  I7i  '7i  I7l 

Maynard's 10  10  10  20  40 

Maypole  Dairy i62i  100  100  25  125 

W'elford's  Surrey  Dairies 8  8  8             6 

The  net  profits  of  Lipton,  Limited,  which  dropped  from 
£183,488  in  1914  to  £122,673  in  1915,  rose  to  £169,444  in 
1916  and  to  £302,587  in  191 7,  the  highest  point  in  the  com- 
pany's  history.' 

In  order  to  meet  any  possible  criticism  on  the  part  of  the 
consumer  that  these  results  were  obtained  at  his  expense  and 
in  order  to  show  that  high  prices  do  not  necessarily  mean  high 
profits,  the  directors  state  that  "by  selling  goods  of  the  highest 
standard  of  quality  at  the  lowest  possible  prices,  the  com- 
pany's shops  are  more  popular  than  ever  and  hundreds  of 
thousands  of  new  customers  have  been  attracted  thereto, 

'  The  Economist,  June  2,  1917.  P-  1026. 


GREAT   BRITAIN  y_ 

and  the  very  much  larger  turnoxv>r  consequent  thereon  has 
resulted  ,n  substantially  increased  earnings."     Nevertheless 

It^ii.  fT"i'\  '■"""•■.^''  '^'  ^°"°^*"«  ^'«<l"^"t  figures  are 
not  Idee  y  to  be  lost  sight  of  by  those  who  are  agitating  for 

the abohtjon  of  "profiteering". 
Vear  Ended  Ma.H  P^^^      ^^^       p^^^t^      "^?.^%iWde„d. 

BS---  lil^S  i»  ?^^2  tik  1 

1917 f?l„2       "'-fiS       169,444        45.104        nil 

44^,776       140,189       302,587         44,057  7j 

•Including  £«o.889  drawn  from  "premium  on  .hares  account." 
The  Economist,  June  2,  1917,  p.  1026. 


f'f 


CHAPTER  V 


The  Condition  of  Workmen 

When  the  war  broke  out  many  mills  and  factories,  antici- 
pating a  reduced  demand,  curtailed  their  activities,  and  in 
consequence  of  this  large  numbers  of  wage  earners  were 
thrown  out  of  employment.'  Many  merchants  also  reduced 
their  staffs  and  cut  the  wages  of  their  employes.'  There  was 
a  general  fear  that  business  would  greatly  diminish  and  that 
widespread  destitution  would  result.  To  meet  the  emergency, 
the  Prince  of  Wales  Fund  was  established  and  several  million 
pounds  were  collected  for  the  purpose  of  relieving  the  antic- 
ipated distress. 

However,  those  who  predicted  the  ruin  of  industrial  and 
commercial  enterprises,  with  all  the  misery  that  such  a  break- 
down would  entail,  proved  false  prophets.  The  revival  of 
business  came  almost  on  the  very  heels  of  the  shock  which  the 
declaration  of  war  produced. 

The  r?  A  unemployment  in  the  .vfiicr re^  trades  of  Eng- 
land ana  Wales  rose  in  August,  1914,  to  7  pci  cent,  or  to  nearly 
treble  of  what  it  was  during  the  month  of  July,  but  by  the 
end  of  November  it  fell  back  to  the  July  rate  and  since  that 
time  the  percentage  of  unemployment  among  English  trade 
unionists  has  been  steadily  declining;  during  the  latter  part 
of  1915  the  ratio  was  0.6  per  cent  and  at  the  end  of  1916  it 
was  again  only  half  of  that  recorded  for  December,  1915.' 
This  low  level  was  maintained  through  the  first  half  of  1917;  a 
slight  reaction  set  in  in  September,  when  the  percentage  of 
unemploymp">.t  rose  to  1.3;*  this  was  almost  entirely  due  to 
the  orders  restricting  the  consumption  of  cotton.  In  record- 
ing this  increase,  the  Labour  Gazette  adds  that  nearly  all  prin- 

'  The  Round  Table,  vol.  vi,  p.  73. 
'  The  Nation's  Business,  November,  1917,  p.  30. 
'  Labour  Casette  (British),  January,  1917,  p.  4. 
•  The  Economist,  November  24,  1917,  p.  387. 

78 


GREAT   BSr 


79 


stances.2    At  thf  ppH  «f  t  according  to  circum- 

was  i.o  pe   ceit  and  at  tir"'7V  p'?'  ^'^'^  ""^""P'^yment 
Ti,    r  n      •      '  ^*  *"^  ^"d  of  February  o  o  ner  r.-nt 


1902—4.0 

'903—4.7 
1904—6.0 
'905— 50 


1906—3.6 
'907-3.7 
1908—7.8 
1909—7.7 


1910— 4  7 
'911— 30 
'912—2.4 
'913—2  I 


'914— 3  3 
191.S— I.I 
1916—0.4 
'917—0.7 


These  figures  are  confirmed  by  the  statUt.Vc  r.( 

ment  obtained  in  connection  with  v!?         x.      unemploy- 

sr— —SB'S 

'910   1.2  in  1915,  4.2  m  1914  and  3.6  in  ign  » 
war  . he  nee  reaching  i,s„aj;lr:;;r;t°wht 

t,llZ':Tst%''T'"  ""  "■*»  "■-  ^ ""  - 

Af*     .u      T        559.476,   the  correspond  ng  date  in    101,4 

•t  r'd'b  ^?u:rr ^  ^^-^^'^  -ar^itTn^a. 

d-crease  thU  H         ^'  ^^'  ^^'^  '^S"'"^"  ^^^^^-d  a  substantial 

crease,  this  decrease,  apart  from  the  usual  seasonal  fluctua- 

4  m'^'  J?""''"T.  1918.  p.  3 
^»irf.,  -November,  1916,  p.  ^04. 


k  '•' 


So  PRICES   AND    PRICE   CONTROL   DURING   THE   WAR 

tions,  being  since  maintained.  This  has  been  due  to  great 
demand  for  man-power  liecause  of  the  war. 

The  following  table  shows  for  England  and  Wales  the  total 
number  of  paupers  in  receipt  of  p<x)r  relief  at  the  end  of  f.'arch 
in  each  of  the  years  1914,  1915  and  1916: 

1914         1915         1916 

Catual  pauper* 8,609  S.»79  4.056 

Paupers  in  receipt  of  outdoor  medical  relief  only  19,868  18,970  IS,997 

Lunatics  in  lunatic  asylums 100,941  102,975  loo,i3a 

Other  classes  of  paupers 643,643  627,900  561,048 

In  December,  1917,  compared  with  December,  1916,  the  total 
number  of  paupers  decreased  by  24,922.' 

The  absence  of  distress  since  the  war  has  also  been  shown 
in  other  wavs.  In  the  early  days  of  the  war  a  government 
Committee  on  the  Prevention  and  Relief  of  Distress  was 
appointed,  the  country  was  orj  nized  under  local  representa- 
tive committees  and,  as  prev'  ..ly  stated,  a  National  Relief 
Fund  (the  Prince  of  Wales  Fund)  was  opened.  "The  experi- 
ence of  these  committees  showed  .  .  .  that,  after  indus- 
try had  readjusted  itself,  assistance  was  required  only  in 
isolated  cases;  at  the  end  of  1916  it  was  practically  confined  to 
watering  places  on  the  east  coast,  where  lodging  house  keepers 
have  suffered  exceptionally  in  consequence  of  the  war."' 

The  records  of  the  distress  committees,  formed  under  the 
Unemployed  Workmen  Act,  1905,  give  similar  results.  In 
December,  1914,  the  number  of  persons  receiving  relief  from 
such  committees  amounted  to  6,055,  or  nearly  double  the 
number  in  December,  1913.  In  December,  1915,  the  number 
of  persons  receiving  such  relief  had  fallen  to  the  insignificant 
total  of  74;  a  small  increase  (to  289)  was  recorded  for  Decem- 
ber, 1916.' 

Concurrently  with  the  decline  in  the  number  of  unemployed 
and  of  paupers,  there  has  been  an  increase  in  the  number  of 
women  eqgaged  in  gainful  occupations.  According  to  the 
findings  of  the  British  Association  for  the  Advancement  of 

'  Labour  Gazette,  January,  1918,  p.  24. 
» Ibid.,  November,  1916,  p.  405. 
"  Ibid.,  January,  191 7,  p.  25. 


GREAT    BRITAIN 


It 


Science,  which  investigated  the  effect  of  the  war  on  the  Indus- 
trial  conditions  of  Great  Britain,  the  nunilx^r  of.ccupi^ 

In  mid-April.  19,6.  the  number  had  risen  to  5.400  oot^Tn 

nmes  the  normal  peace  time  increase,  which  for  such  a  peri^ 
would  have  been  only  about  94,830.'  ^ 

As  the  committee's  report  points  out.  this  accelerated  rate 

llTStVLr  t'"'  ^"'1^  "  ^'^^  ^-■^"•^'•"«  ''^  "^^'"n 

hit  *""5-     f^'^^^'abJy  fewer  women  have  married  and  fewer 
have  retired  from  ndustry  on  marriage.     The  Labour  Galell 
which  in  Its  statistical  tables  does  not  take  cognizance  o 
women  occupied  in  domestic  service  or  in  very  smaM  work 
shops  (such  as  exist,  for  instance,  in  the  dressmaking  trade) 
ga.e  the  number  of  females  occupied  in  July,  ,914  as  3  272  - 
000;  by  January.   ,917.  this  number  rose    o  4^44  o^an 
increase  of  ,,072.000.  all  of  which  but  !.««  represent^S^^cct 
replacement  of   men   by  women.»     In   Oct<Lr  .9.7    the 
number  of  men  replaced  by  women  was  1.1592  oo(^ »    The  fie 
u^sare  based  on  returns  made  by  employees  to  the  Industriai 
(VVar  Inquiries)  Branch  of  the  Board  of  Trade 

The  unprecedented  demand  for  lalx)r.  coupled  with  rising 
prices,  led  to  a  marked  increase  in  wages,  much  of  this  inc?eTs^ 

to  the  period  of  the  war.  Up  to  the  end  of  December  I9i7 
neariy  s.x  million  work  people  received  some  advance  0„ 
an  average,  the  weekly  increase  was  alK,ut  6s.  per  head- in 
some  industries  directly  concerned  with  the  supply  of  wl^ 
requirements  it  ranged  from  los.  to  12s.     The  increle  fn 

'The  Economist.  NovcmU;r  24,  lofT,  p  817 
p.  .64    "'  """""'  ■'^""^^•-  ''''•  P  ^=  -  ^'-  r>-  Economist,  February  .6,  .9,8. 


te  PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 

The  Board  of  Trade  discontinued  in  1914  the  publication 
of  index  numbers  of  money  wages.  Taking  1900-  100  as  a 
base,  the  figures  for  1913  were  106.5.  Professor  Nicholson's 
estimates  are  107  for  1914,  117  for  1915  and  137  for  1916. 
Mr.  Kitchin's  index  number  for  1916  is  only  126.' 

It  is  obvious  that  the  increase  in  the  rates  of  wages  was 
much  below  the  increases  recorded  in  the  price  of  food  and 
other  necessaries,  but  the  figures  take  no  account  either  of 
the  increased  income  of  the  family  or  of  the  rise  in  earnings 
due  to  greater  regularity  of  employment,  overtime  and  night 
work,  transfers  of  individuals  to  higher  paid  places,  speeding 
up  of  piece  work,  etc'  It  is  to  be  regretted  that  no  statistics 
are  available  which  would  show  the  extent  to  which  the  total 
earnings,  as  distinct  from  rates  of  wages,  have  increased  since 
the  beginning  of  the  war. 

In  a  letter  to  the  Economist  for  September  22,  1917,  Mr. 
W.  R.  Lawson  surmises  that  "  the  national  wages  bill  has  been 
more  than  doubled,  probably  more  than  trebled."  He  con- 
siders that  the  fabulous  profits  that  are  said  to  have  been 
made  were  only  a  sequel  to  the  fabulous  wages  and  he  holds 
both  responsible  for  the  rise  of  commodity  prices.  The  rise 
of  wages  and  profits  led  to  an  increased  demand  for  goods  and 
intense  competition  among  buyers  forced  the  prices  up. 

Writing  at  a  much  earlier  date,  Mr.  C.  H.  d'E.  Leppington 
objected  as  far  as  Great  Britain  was  concerned  to  a  statement 
contained  in  the  U.  S.  Bureau  of  Labor  >-  llct'n  on  food  prices 
during  the  war,  that  "the  hardship  •  .  the  increased 

cost  of  living  has  in  many  cases  been  :     i .         <  1  by  a  decrease 
of  purchasing  power  among  the  work  ."     According 

to  Mr.  d'E.  Leppington,'  it  can  not  be  .... ^  io  apply  to  Great 
Britain,  in  view  of  the  enormous  wages  now  earned. 

The  report  on  national  insurance  covering  the  administra- 
tion of  the  law  during  the  last  three  years  bears  witness  to  the 

•  J.  S.  Nicholson :  "Statistical  Aspects  of  Inflation,"  Journal  of  the  Royal  Statistical 
Society,  July,  191 7,  p.  489. 

•  Interim  report  of  the  committee  appointed  by  the  Board  of  Trade  to  investi- 
gate the  principal  causes  which  le<l  to  the  increase  of  prices  of  commodities,  p.  5. 

•  The  Economic  Journal,  March,  1916. 


GREAT   BRITAr.V 


Bi 


from  the  l)eginning  o  X  'I^,:  I*''  '""P""  -''^  f'>^th  that 

women  has  ^a;:;;^^  li trd  .^tra^rTlT^'  '"^'"  ^"' 
larly  true  of  women      In  loi  i  A,"''*^'^^'*^''-     ' 'i"*  's  particu- 

«et.n.  the  ..nefit"'  o/;?;-i;:.:rrl7:Ltf  ^ ^" 
week.     In  19,5  it  fdl  to  three  cents  in  ,q, a      »  '"'""''  ^ 

figures  for  1917  have  not  bc-erm^H  .^      ^"  ^""^  "'"'•*:  ^''e 

decrease  was  expected  ■  ""'  ^"'  """*''^"'-  ''"P<^«^nt 

fare  of  the  workrr  and  tgett^^h^^^^^  '^  ^'f  ^"  ^''^  ^■^'• 
sufficiency  of  good  food  R^f  !i.  ^  *""""«''  *^  '"«"^e  a 
l-edonsL.a'^i:^,i„'L1r;^'^^^^^^^  T'"'""f  "^  '""^'^ 
was  confronted  with  a  nrnJ  •  '^"^'"'■^"^^''•^"^^•on 
among  the  maVsoT^Ie"'""""  P'^^'^"'  deterioration 

which  the  wartrl-id'ed  ^.^^^^  ^"e'n  ^n  ;r^:r7^T"^ 
ness  failures.     Th  .se  dedin^Tro"   7  ,0     „    'o  'fr  "^  ^"" 
i?i4.  to  4.864  in  1915.  to  3..10  in  ,9;6'an    t  .'  'a  ?  fn'.'oV: 
To  some  extent,  the  d.pUm.  h^.  1         .  '^^  m  1917, 

legislation  which  has  itn  bro.  T    "'  '"  '"'''^'"'  P''^^'^^'^^ 
outbreak  of  war   but  a'  '"'"  "''"■^"■""  ''"^'^  ^''^ 

the  .enera.;\;:;u',r  r  -i:''];;^^^^^^^  '^as  been 

resuming  from  the  ar.iv„  ™..  r  *  artihcial,  prosperity 

steadily  rW„"  level  of  nrir^T"  "'  "■"  '^"'""'  "  «■ 

making  tnueh  n,on:y";„";f:i:,r„;''it':r,^^""r^  "^  °- 

.  .s  tntmateria,  for  the  pur,x,i  i„''vi::"t„  .ttlo  here  .he 


>  f 

I 


FRICES   AND   PKTE  CONTROL   DURINCi  THE   WAR 


question  as  to  whether  this  revival  of  industrial  and  com- 
mercial activity  was  a  sign  of  healthy  development  or  merely 
the  result  of  a  feverish  demand  on  the  part  of  the  government 
for  services  and  for  rommcMlities  necessary  to  prosecute  the 
war.  What  »9  of  importance  is  that,  to  use  Professor  Can- 
nan's  description  of  labor  conditions,  "the  unemployment 
percentage  curve  sank  almost  to  the  case  of  the  chart ;  old  age 
pensioners  were  dragged  from  their  retirement ;  thousands  of 
"flappers,"  girls  in  their  early  teens,  left  their  trivial  home 
tasks  and  peopled  shanties  run  up  for  government  depart- 
ments in  St.  James's  Park  and  the  Embankment  Gardens,  and 
hundreds  of  thousands  worked  in  munition  factories  every- 
where, while  their  brothers,  the  "flippers,"  got  promotion  at  a 
rate  which  suggested  that  Father  Time  must  have  taken  to  an 
aeroplane.  Wages  in  the  new  occupations  were  very  high, 
and  even  in  the  depressed  trades  "war  bonuses"  had  to  be 
given  to  retain  a  much  diminished  number  of  workers.  So 
far  as  money  receipts  were  concerned,  the  working  classes 
never  had  such  a  glorious  time."' 

Ace.  rding  to  Mr.  Paish,  "the  additional  earnings  of  the 
working  classes  arising  from  the  shifting  of  lalior  to  more 
highly  paid  industries,  full  employment  with  much  overtime, 
advances  in  the  rates  of  wages  and  allowances  to  the  families 
of  soldiers  and  sailors,  completely  neutralized  the  advance  in 
the  cost  of  living  and  caused  the  consumption  of  the  working 
classes  to  show  m-  -ked  increase."' 

The  Spectator  got.  so  far  as  to  state  that  "wa'  ad  gone 
up  in  the  majority  of  cases  far  more  than  priceo  iiad  risen. 
In  many  instances  wages  have  risen  three  or  four  hundred  per 
cent  since  the  war  began,  in  some  instances  even  more;  while 
prices  have  only  risen,  at  most,  a  hundred  per  cent.  .  .  . 
Introduction  of  female  labor  into  workshops,  together  with 
the  extended  use  of  unskilled  labor  on  nominally  skilled  work, 
increased  the  family  incomes  enormously." 

'  E.  Cannan:  "Industrial  Unrest,"  The  Economic  Journal,  December,  1917,  p. 

455' 
'George  Paish:  "War  Finance,"  Journal  of  tkf  Royal  Statistical  Society    .!ay, 

1916,  p.  276. 


GRKAT   BRITAIN  |_ 

wereTrllT  'I"''"'!  """*  '^'  ^ "'^^  *'"^"'"«  '•'^'•^■^  ""  ^^e  whole 
were  not  larkmg  the  necessaries  of  existence  was  to  In.  found 

if  ife  tT:  *'T' T  ""  ''^'  ^"""'"'^^  -^'  aclornnu-nt. 
jn  prox  mcial  towns  show  a  record  of  high  profits,  their  husines* 
m  many  .nstances  having  been  limited  only  f,y  the  depletion 
of  staff,  and  the  inability  of  replenishing  them  fast  enough  " 
meet   the  demand.     Indoubtediy.    many   bujers  in   K 

tau'r^r"  '"k"''""'  '^''^'^"^'  «""•  ^^•''-  ^^^  ^-«-'" 

^m  .  r  "'  '^'  "^'"''  "^  ^^•^  «"*"'«  ^'''  '^  '■^"'niouH  that 
he  appeal  for  war  economy  has  In-en  wcn-fully  neglects!  by 
the  London  shopper  •  or  that  shops  and  stores  have  Ln  vying 
«.th  breweries,  hotels  and  restaurants  in  the  prosperity  which 
they  enjoy.*  the  periodical  reproaches  not  only  the  wage  ean 
mg  c  ass  for  the.r  thoughtless  expenditures  but  the  mass  of  the 

gocHls  and  services  which  the  financial  and  industrial  task 
imposed  upon  Great  Britain  urgently  rec,uired  ' 

Mr.  Selfridge.  the  net  profits  of  wh<,se  department  store  in 

attributes  the  large  increase  in  his  turnover  to  the  fact  tha 
he  caught  the  sp.r  t  of  the  changing  demand  and  provided 

In  r  ^ea  ^''T'  \  ^^^"'"''"^  ^"  '''""'  ^^-e  has  been 
an  increase  of  purchases  by  munition  workers  and  other  wage 

earners  whose  incomes  have  risen;  they  huv  household  neces- 
8.  es  and  comforts  as  well  as  articles  of  wardrobe  .nd  cheap 
jewelry;  few  fancy  stocks  such  ,  part>  ^r,^,  ,  ..S 
gloves^etc.  are  sold..  The  exp,  ence  of  oM,er  s,..  i"  -  .t 
corroborate  Mr.  Selfridge's  contentions  as  to  th.       cline  in 

\\eb^a   largely   luxury    business-have   been    ^fc-wing   a 
st.ady  recovery  since  their  decline  -'n   ,914;  th(  „ 

p.  'ne^'-  "^'^^  ^^'"^'  °'  ^'^  f^°"'™'-"  rhe  Edinburgh  Revicu 


Sup 
'The 
'Ibid 


..i». 


'  Ibid 


"■a.  p.  75- 
Economist, 
April  13, 
rebruarj' 


June  9,  1017,  p.  1064. 


P-30 


IM.,  [ur.i  9,  1917 


«9i8,  p.  596 
V  17.  I9«7.  P-  J90 


p.  1064;  also  The  Nation's  Bust 


ness,  NovemJ" 


06 


PRICES  AND   PRICE  CONTROL  DURING  THE  WAR 


i.'25.638  in  that  year  to  £46,780  in   1917.  and  Jay's,  the 
fa'  hiona'^lc  ladies'  paradise,  though  not  as  prosperous  as  in  the 
pnwar  times,  seems  t«.  lie  able  to  maintain  itself  with  a  profit 
which  climbed  up  from  £12,222  in  1915  to  £15,197  in  1916 
and  £15.917  in  1917.  as  compared  with  £40,857  in  1913.'    Nor 
are  the  purchases  of  luxuries  confined  to  the  people  in  and 
around   London.     The  Wales  commissioners  appointed   to 
inquire  into  the  causes  of  industrial  unrest  reported  that 
the  workers  resented  the  ostentatious  parade  of  wealth  and 
fashion  in  the  streets  of  Cardiff,   Newport  and  Swansea.' 
The  Scotch  commissioners  found  that  on  the  whole  among 
industrial  workers  there  was  no  serious  difficulty  in  meeting 
the  cost  of  living,  at  least  among  the  workers  engaged  in  the 
largest  industries  in  Scotland.     The  experience  of  shopkeeper: 
and  cooperative  societies,  the  reduction  of  cases  in  small  debts 
courts,  the  savings  banks  returns,  the  reports  of  Poor  Law 
authorities,  etc.,  all  seem  to  indicate  that  on  the  whole  the  ag- 
gregate weekly  incomes  of  industrial  workers  Keep  pace  with 
the  cost  of  living.' 

While  the  purchase  of  nonessentials  in  time  of  war  is  deplor- 
able, one  realizes  that  there  are  extenuating  circumstances  for 
such  expenditures,  especially  o;.  the  part  of  the  p<K)rcr  classes 
of  the  community.  They  have  been  denied  the  comforts  of 
every  day  existence  and  now  for  the  first  time  in  their  li\es 
they  find  themselves  in  possession  of  some  extra  money. 
They  can  hardly  be  blamed  if  they  want  to  spend  it  or  if  they 
do  not  spend  it  wisely.  "Changer  in  distribution,  when  the 
general  standard  of  living  is  rising  rapidly  are  likely  to  lead  to 
extravagance,  more  especially  in  war  time,  when  all  condi- 
tions favor  waste."* 

The  belief  seems  to  l>e  general  that  the  condition  of  the 
working  class  is  one  of  widespread,  if  artificial,  prosperity, 
that,  measured  by  all  ordinary  tests,  poor  people  appear  to 


Bulletin  of  the  V.  S.  Bureau  of  Labor 


'  Supra,  p.  74. 

'  Industrial  I'nrfst  in  Great  Britain, 
Statistics,  No.  ly;,  \i.  i8o. 

•  Ibid.,  p.  206. 

*  A.  \V.  KirkaUly  (editor) :  Credit,  Industry  and  the  War,  being  reports  and  other 
matter  presented  to  the  Section  of  Economic  Science  and  Statistics  of  the  British 
Association  for  the  Advancement  of  Science,  p.  lo. 


•  i«KAT    RRITAIN 


«7 


have  an  uniiMi.il  amount  of  mom  v  ^»  .i.  • 
may.be  called  the  cheap  uTur;\'a  .^^h  "r*'  '  ^'"'^^ 
J^elry.  piano..  amuHemon,re,7  T, '  "  "  "•"  ""•^'""•^•^ 
J-hing.  an.I  the  consumption  of  ^^  .^  "  1""^  ^""'y  «""- 
hangcneup.     The  greater  part  ^f?  '*^'- «"*' "Pirits 

doubt  iH^ing  .pent  on  clothesTrHlanrr''  *''*"^"'  '"^  "" 

While  Home  maintain  haT'the  u  i  "'^L''  "^•^'^^''^rieM. 
probably  a  permanen  rise  In  rK  '*'  '?"«'''  «"  '^'•dent  and 
trade  unlonUt.  and"nhe^  lalnt'  "*""l'""'  "^  ''^^"  ""^  ""'>  "• 
their  voices  heard  '  alj  to  h"  V"^'  ''"^"  '"  '"^•*^' 
sections  of  the  a  u  •■  Itv^hl  *"  ^"''^^'  ''^'^  ""organizecl 
a  different  opin,  .  ,  =         ^'  "" '"'''  ""^"^  "»»'<^"  *ho  express 

"«^^!J::^vi^<:;:i:r:;;n""  ^^^-^  -'--'  ^^at 

diHtren.  in  the  count  VthanTn  L?  T  '"'*  '^'''  '"  '*-  ""''' 

for  example,  the  Jolro^S^^";"^^  ""  T'  "^  '''"'~ 
wage  workers  and  lalx,rerrare  ^a;  LT'^V  "".'  "'."''>'• 
prices,  and  actually  have  to  curtaH  h  "'  ^^  *''"'  "'*''  *" 
though  the  pressure  of  hLhnrri  u  '""^"'"Pf'"".  even 

in  some  cases,  by  the  emnlovmen    ?''  ''":''  ''"^'"  '"'^•«^'«'- 
munition  works  and  byThe  oZi„l    f  T""'^''''  "^  "  ^"'"''y  *" 
>  V  ,men."»  ^     ^  ""^"'"^  "^  **"^r  Paid  occupations 

-.iLteeT^e  ty':,  'Ct"m  V^  ""^^^  "^  ^-''«>  « 
supply  of  the  United  Kin^  2  ^.f  .'/'"^^'  "^  ^'^^  ^'-' 

declarationof  war.'    Inks  rtr^^  ^"^  "^^"'  "'^ 

conclusion  that  the  sunn  !  av.^i"'  ,       "™'"i«ee  came  t<,  the 

provided  a  margin  ora'Stl"';^^^^^^^^^  f'  '^'^^  ^as 

necessary  for  proper  nutrifJnn  t  !  ''*'*'  *''^  minimum 
remark  that  "while  the  21  JfJ^IVT"''"''  '^  ^^^^^  ' 
the  support  of  the  population  h/^  ^^'  ^'"'"  ^^^^"-^^  ''- 
a;eclth^i„e.ua,iti-r:^S-  — -^^^^^^ 

: --^^M  or  .He  c„.„..ee  on  p..„.  C.  S^.^ ^^ 


Ik 


88 


PRICES  AND    PRICE  CONTROL   DURING  THE   WAR 


rations  of  many  below  the  level  of  efficiency.  Any  curtail- 
ment of  supply  .  .  .  would  result  in  the  poorer  classes 
obtaining  less  than  needful  for  safety — unless  distribution  is 
organized."' 

There  was  never  so  much  money  in  circulation  in  this  coun- 
try as  at  present,  writes  Mr.  Hurd,  and  we  were  never  so  poor; 
the  queues  of  women  and  children  at  the  shop  doors,  waiting 
for  hours  in  the  cold  for  small  quantities  of  butter,  tea,  sugar 
or  other  articles,  are  a  familiar  picture  now.*  In  a  previous 
article,  Mr.  Hurd  called  attention  to  the  fact  that  the  British 
nation,  notwithstanding  the  popularity  of  the  war  with  wage 
earners,  who  are  employed  more  fully  than  ever  and  whose 
wages  are  exceptionally  high,  is  confronted  with  increased 
economic  embarrassment.  "The  country  is  becoming  poorer 
day  by  day — using  up  wealth  at  a  prodigious  rate;  on  the  other 
hand,  it,  or  rather  a  large  section  of  it,  is  enjoying  a  period  of 
apparent  prosperity  and  spending  freely  the  war  wages  and  war 
allowances,  forgetful  that  a  country  which  is  ceasing  to  produce 
wealth  to  the  normal  extent,  and  whose  expenditure  will  fall 
little  short  of  £1,600,000,000  in  the  present  financial  year 
[1916],  must  have  a  rude  awakening  unless  it  mends  its  ways."' 

Cost  of  Living 

The  relation  between  prices  and  earnings  can  be  best  ascer- 
tained by  following  the  Board  of  Trade's  method  of  taking  the 
standard  working  class  budget  as  it  has  been  established  by 
their  inquiry  in  the  summer  of  1904.  This  is  based  on  1,944 
family  budgets.  The  average  weekly  income  of  the  families 
included  in  the  investigation  was  36s.  lod.  per  week  and  their 
total  expenditure  on  food  was  22s.  6d.,*  being  61  per  cent  of 
the  family  income. 

'  The  Food  Supply  of  the  United  Kingdom.  A  report  drawn  up  by  a  committee 
of  the  Royal  Society  at  the  request  of  the  P.esident  of  the  Board  of  Trade,  Cd. 
8421,  London,  1917. 

'A.  Hurd:  "Wages,  Prices  and  Supplies" — A  Vicious  Circle,  The  Fortnightly 
Rerieu;  January,  1918,  p.  38. 

'A.  Hurd:  "British  Commerce  in  War-time:  The  Abuse  of  Sea-Power,"  The 
Fortnightly  Review,  January,  1916. 

•  The  Cost  of  Living  in  igi2,  Cd.  6955  of  1913,  pp.  299-300,  quoted  from  A.  L. 
Bowley:  Prices  and  Earnings  in  Time  of  War,  p.  16,  and  the  Report  of  the  Six- 
teenth Annual  Conference  of  the  Labor  Party,  p.  159. 


GREAT   BRITAIN 


89 


This  expenditure  on  food  at  the  oricos  nf  fU 
1904  was  distributed  thus:'  ^  '""""^'"  ^^ 


Bread  and  flour  '' 

Meat  (lK...ghtl.vweiKhty  ..■.■■  i 
g^^^;;'"«'(.ncfudingfish)  ..  t 
o 


Fresh  milk ......  ' | 

Cheese.  .  . 

Butter.    ..,'.' ° 

Potatoes * 

Vegetables  and  fruit ^ 

Total ° 


d. 
7 

Hi 
llj 

m 

o 

31 

6} 
•) 

II 

II 


C-urrants  and  raisins  ^ 

K^ce,  tapioca  and  oatmeal 

Coffee  and  cocoa  I 

Sugar 

Pickles  anil  condiments 
Jam,  marmala.le,  ireacle  and 

syrun 
Other  items    .       ........         ° 


d. 
6 

3i 
9J 


i2B.    6<l. 


Cost  of  One 
Week's  Food 

'904  'VJ'""iy 


Percentage 

Increase  above 

July.  1914 


Purchasing  Power 
of  a  Sovereign 
Spent  on  Food 


>9I4 


1915 


1916 


1917 


July.. 
Aug. 

Sept. 

Oct. 
Dec. 

Jan. 

March 

June 

Sept. 

Dec. 

Jan. 

March 

June 

Sept. 

Dec. 

Jan. 
Feb. 


8 
29 

13. 
30. 

I 

I . , 
I .  . 
I . . 
I . . 
I. . 


I . 
I . 
I . 
I . 
I . 

I. 
I . 


25 

0 

29 

0 

27 

9 

27 

9 

38 

^ 

38 

3 

29 

3 

29 

9 

3' 

6 

33 

9 

34 

1 

36 

6 

37 

0 

37 

9 

40 

6 

42 

0 

46 

9 

47 

9 

48 

3 

'IbTVl^'  "''«-'«''  Annual  Conferen, 


p.  160. 


16 
II 
II 
>3 
«3 
17 

'9 
36 

3,S 
37 
46 

48 
.SI 
62 
68 

8- 

91 
93 

ice  of  the  Labor  Party, 


30 

17 
18 
18 
17 
17 
17 

16 
«5 
14 
»4 
13 

•3 
13 

13 
tl 
10 

10 
10 


o 
3 
o 
o 

8 
8 
o 

10 
10 

10 

7 
8 

6 

3 

4 

II 

8 

5 
4 


P-  '59. 


90 


PRICES  AND  PRICE  CONTROL  DURING  THE  n.\R 


The  figures  on  page  89  relate  to  large  towns;  for  small  towns 
the  rise  is  two  per  cent  less  throughout.  There  is  no  infor- 
mation as  to  the  country.  These  figures  take  no  account  of 
alterations  in  dietary. 

When  allowance  is  made  for  such  changes  in  dietary  as  are 
estimated  by  the  Ministry  of  Food  to  have  taken  place,  the 
increase  in  the  average  expenditure  of  a  working  man's  family 
is  considerably  less  than  the  rise  in  prices  would  indicate. 
This  is  brought  out  in  the  following  table,  which  compares  the 
general  percentage  increases  in  (i)  prices  and  (2)  expenditure. 
The  price  percentages  (i)  are  based  on  the  same  quantities 
on  March  i,  1918,  as  in  July,  1914,  a  basis  which  affords  a 
measure  of  the  increased  cost  of  maintaining  a  prewar  stand- 
ard of  living,  so  far  as  the  articles  included  in  the  Board  of 
Trade  statistics  are  concerned ;  and  the  expenditure  percent- 
ages (2)  are  based  on  the  actual  consumption  of  the  same  arti- 
cles, so  far  as  ascertained,  at  the  beginning  of  1918  in  compari- 
son with  prewar  consumption.  Certain  items  found  in  the 
working  class  food  budget,  such  as  vegetables,  fruit,  currants, 
raisins,  rice,  tapioca,  coffee,  pickles,  condiments,  jam,  mar- 
malade, are  not  included  in  the  comparative  statistics.' 

Average  Percentage 

Increase  since  July,  1914 

Small 

Large  Towns  United 

Towns  and  Kingdom 

Villages 


(l)  Level  of  retail  prices  of  articles  of  food, 
assuming  same  quantities  at  both 
dates 

(3)  Expenditure  on  food  allowing  for 
changes  in  consumption 


48 


103 


4a 


107 

45 


Some  of  the  changes  in  the  dietary  considered  by  the  Labour 
Gazette  are  the  omission  of  eggs,  the  substitution  of  margarin 
for  butter,  the  reduction  in  the  consumption  of  sUj^ar  and  fish 
to  one-half  of  that  prevailing  before  the  war.  With  such 
changes,  the  general  percentage  increase  from  July,  1914,  to 
December  i,  1917,  would  have  been  59  instead  of  105.' 

'  Labour  Gautte,  March,  1918,  p.  97. 
» Ibid.,  December,  1917,  p.  443. 


GREAT    BRITAIN 


91 


be^sl^SS^l^rr^-^:^--ndi.Te.  .He.  Have 

remained  practically  uS'teTed  The  1"^  '"  ''"'''  ""^''^ 
July.  1914,  to  MarcH  "0,8  in  h  ^r^-'^S^ '""^ase  from 
ordinarily  entering  into  til         l^^  ^T'  ^^  ^"  '^^  '^^'n^ 

indudin/food.  ::nt:  d:t;i'nr7u;'Tndi:;/Tt''^  ^"^T- 

estimated  at  8s  taking  for  fhJ  and  light,  etc.,  may  be 

same  quantities  oTZ  Zr       P"''P«^^.«f  ^^is  calculation  tHe 

r9.4:?f  increases  de  to  taxa"^^^^^    '"  "^'T!"'  '''''  ''  '" 
between  tHe  two  dates  u-1  ""  '"'''"''^^'  '^^  '"^^ease 

i^«*««rC7a.l  ^isnTpo^:  bl^to"  T'     ^""^"'"^  ^°  ^^e 

of  tHe  level  of  retairprCs^  ^eX^vT"'''"^'"" 
penditure  similar  to  th.,    •  ^^"*^?  'y  ^y  a  comparison  of  ex- 
nation  of  the  avera  *^n  ^"''"•''"''  '"'^"''^  *°  ^""d.     Combi- 

THis  statement  is  folIow^H  h,. .  •  '^^  P^'*"  ^^nt. 

matter  of  general  k^tredtfH,tS  T"'  '''''  ''  '^  ^ 
reductions  in  tHe  quant^ffpt  ^  I  .  ^ ''^^"  ^""^'^^"■^^^^ 
other  than  foodstuT  ai^  h^.^'^ -'^.."^  ^""^^  commodities 
tween  SOand^s  per  c;'.^  !  ^  '"^!'^*'^  '"'^'•^^^^  "^  be- 
in  excess  of  the  avera."  n  '"^""^'^r  '^  *''^'"^f«'-^  ^"'"-^•hat 
the  beginning  of  thevSr  Tftn^  '^r">' ^P-^'^-e  since 
showing  the  amounts  of  v.  '°"'''  °^'^'"  "'^'^^  ^^^'^^ 

purchased,  and  if  ot  ell  T'  r""""^'^'-  -^  ser^■ices 
'aborers-  investments  ,V  "•■'""  ''^^'  ^^''^  »^^^"  the 

and  their  deSt^lnlalgT^irT^^^^^  ^"'  "f7  ^^-"^- 
a  greater  degree  of  certZtv  anH  ^^  '''"'''  "P"^"^  ^^'^h 

been  the  actual  effects  o  "he  w.   '''"''^7  ''  '^  ^^'^^^  ^^^'^ 
class.  ^  ^""^  ''^'"  "P«"  the  British  laboring 

'  ■^'*"'"'  ^^aae'te.  March,  19,8,  p.  9-. 


:M|ii 


CHAPTER  VI 

Rise  in  Prices  and  Industrial  Unrest 

There  was  much  industrial  unrest  in  the  years  just  preced- 
ing the  war;  strikes  were  frequent,  and  the  expenditures  of 
the  chief  British  unions  on  industrial  disputes  increased  from 
an  average  of  £150,000  a  year  for  the  years  1904-1907  to  a 
sum  of  £1,350,000  for  191 3  alone.'  A  truce  between  capital- 
ists and  laborers  followed  the  declaration  of  war.  On  August 
24,  1 914,  a  special  conference  called  by  the  joint  board  of  the 
Trades  Union  Congress,  the  General  Federation  of  Trade 
Unions,  and  the  Labor  party  passed  the  following  resolution: 

That  an  immediate  effort  be  made  to  terminate  all  existing  trade  disputes, 
whether  strikes  or  lockouts,  and  whenever  new  points  of  difficulty  arise  during 
the  war  period  a  serious  attempt  should  be  made  by  all  concerned  to  reach  an 
amicable  settlement  before  resorting  to  a  strike  or  lockout. 

The  number  of  new  disputes  fell  from  99  in  July,  1914,  to 
14  in  August.  The  general  effect  of  the  truce  can  be  seen 
from  the  fact  that  during  the  first  seven  months  of  1914 
there  were  836  disputes,  involving  423,000  workers;  while 
during  the  last  five  months  there  were  only  137,  involving 
23,000.  By  December  there  were  only  17  disputes  as  con- 
trasted with  56  in  December,  1913.' 

However,  this  peace  was  but  of  short  duration.  Notwith- 
standing great  dangers  from  outside,  old  quarrels  were  .soon 
brought  once  more  to  the  surface;  to  the  former  grievances 
were  added  some  new  ones,  the  most  important  of  which  was 
the  increase  in  the  cost  of  living,  the  main  cause  of  which  was, 
in  the  minds  of  workmen,  "profiteering."  According  to  the 
Labour  Year  Book,  although 

there  never  was  any  express  i.(;reement,  .  .  .  there  certainly  was  the  tacit 
understanding  that  the  mainteni.nce  of  the  truce  depended  on  equal  sacrifices  en 
both  sides.     But,  with  the  piling  up  of  profits  and  the  rise  in  food  prices,  there 

'  The  Round  Table,  December,  1916,  p.  67. 
'  Labour  Year  Book,  1916,  p.  22. 

92 


GREAT   BRITAIN 


93 


.he  fact  that  eSoye™  shown  H  tie  W'  lil"    T"  ""^  '"  ^"  '"''•     '     '     • 
usual-  nude  it  a  one-.ided  blrga'^"'  '  "  *°  '^^"""^  '™"  "profite^ri.  ,  as 

During  the  month  of  February    loi?    th,.r. 
fewer  than  forty-seven  disputes  l^wL'nLX^r^^^^^^^^^^^ 

so  muth"to?c;ut;"wr'''  '""  ^'''"  ^'  ^^^  '''''  --  -^  due 
mucn  to  actual     ,tress  among  wage  earners  as  to  the  desire 

per  tv  "h?;.*  '"^  ''"^"'P^^^  ""^^  '""y  •"  the  fictitiou^  p^^ 
perity  which  war  activ  t  es  have  creatpH      Tt,„. 

groups  of  laborers  who.  famil/eS^^had  „.T,  Zl  Tl' 
ciently  to  meet  the  added  expense  of  liv.nr.   V   I 

^o.  ,„  >«  r„.„u  a.„„,  „.e  .rarr„'i;:::^„'c'',r  ,r 

e«  ,„  ,he,r  protestation,  and  recriminations.  The  unr^t 
may  also  be  attributed  to  an  innate  belief  wh  ch  BritUh 
workmen  posse^  l„  „„„„„  „i,^  ^^  human  bSngftS 
food  bemg  an  obnou,  aljsolute  necessity  for  existence  Ihonfrf 

meeT''r„vTnl:' '"'''^'^^;°'''='"^*  ™  "- ^^^^^ 
aXad":  milLTZX:^'  ^^  ran?-/"" 

p";^?:',h^[?;:."-"-  «•'"  --drrrXby 

tiiiTvi"  '"r'r.  "'""'^'""" ""  •-""•1 "'  ">- »"""": 
ri'^erL^:^:; ------ 

m   u,.t.         The   wor      of   this  extravagance."    writes    the 

'  Labour  Year  Book,  1916 
mLp.st''-  "'-^'""^  ^'"-  -'  -d  '"e  War,-  TA,  Pomra,  Quarterly,  M.y 

*  Letter  to  The  Times,  XoVember  °  ;    .qf;         ^  '''  "^"•'  ''■  "■>'• 


^:a 


94 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


Economist,*  "is  that  it  is  flaunted  in  the  streets."  And  there 
is  no  reason  to  suggest  that  this  feminine  extravagance  is 
greater  than  the  even  more  inexcusable  wastefulness  on  the 
part  of  the  men.  The  paper  calls  attention  to  an  article  in 
the  Herald.  "How  Th'  y  Starve  at  the  Ritz,"  which  is  worth 
study  as  showing  how  keenly  organs  of  working  class  opinion 
appreciate  the  manner  in  which  the  well-to-do  classes  are 
meeting  war  needs  by  personal  sacrifice.  "This  thoughtless 
and  ignorant  extravagance  is  .  .  .  producing  a  very 
critical  and  dangerous  spirit  among  the  working  classes, 
...  the  belief  is  growing  ihat  the  capitalist  as  such  is 
growing  rich  out  of  the  war."' 

In  1 91 5  the  British  Association  for  the  Advancement  of 
Science  appointed  a  committee  to  investigate  the  causes  of 
industrial  unrest.  This  committee  stated  in  its  report  that 
the  revival  of  strife  after  the  truce  of  early  months  of  the  war 
has  followed  upon  a  considerable  and  steady  increase  in  prices, 
especially  of  food.  One  of  the  main  causes  of  the  strife  was 
dissatisfaction  with  conditions,  which  prevented  the  workmen 
from  raising  their  standard  of  living.'  Among  other  causes  of 
unrest  enumerated  in  the  committee's  report  of  special  inter- 
est in  connection  with  a  study  of  price  movements  are:  (i) 
the  suspicion  on  the  part  of  the  workmen  that  they  are  ex- 
ploited, largely  due  to  the  lack  of  knowledge  of  economic 
conditions  in  the  industry  in  which  they  are  employed,  and 
(2)  war  measures,  especially  the  Munitions  of  War  Act,  which 
have  operated  to  curtail  the  freedom  of  action  of  both  em- 
ployers and  employed.  The  irritation  has  been  intensified  by 
the  physical  strain  involved  in  long  hours  of  work  at  high 
speed,  by  the  materially  increased  cost  of  living  and  by  ap- 
parently big  profits  made  by  many  companies,  leading  labor 
to  believe  that  the  nation  was  being  exploited  for  private  gain.* 

'  Thf  Economist,  November  24,  1917,  p.  831. 

'  Ibid.,  .November  24,  1917,  p.  831;  see  also  The  Economist,  September  i,  1917, 
p.  316,  and  The  Economic  World,  December  9,  1916,  p.  747. 

'  Labour,  Finance,  and  the  War,  being  the  result  of  inquiries  arranged  by  Sec- 
tion of  Economic  Science  and  Statistics  by  the  British  Association  for  the  Ad- 
vancement of  Science  during  the  years  1915  and  1916,  ch.  ii,  Industrial  Unrest, 
PP-  20-57  • 

*  Monthly  Revinv  of  Labor  Statistics,  April,  1917,  p.  521. 


OKEAT   BRITAIN 

and  by  trade  union  congre^es   ,t Tali^  committees 

presented  by  Labor  mcErin  tie  Hlse"of' r  "  ""'""^ 
well  as  in  the  debates  which  tolk^t" "here  T7e"w" 
Emergency  Workers*   M^tl^^^i  n         •  '  "*^  "^^ 

attention  t'o  the  t^tioXls^^Z;  '^^^  '^""^ .'»* 
■ts  program  one  finds  the  foC/prop^I^.r  '''''  '"'  '" 

freight  charge,  for  all  procJuceTr/in.TT'   ''^'  ''"""'^   re<luctions  of 

Protection  of  the  vJo^eZlZ       T       "  "'  ""^  *''"'''  "«"''-• 
by  the  enactment  of'^alTin    the"""  1'" '  T^"-'  ""«-">' '"  -«-''  <»  food, 
wherever  advisable.  '  commandeermg  of  supplier  l.y  ,he  nation 

Right  through  the  first  few  months  of  the  u  -.r  th 
general   feehng  that  each  month  V^  u    ?^     ^"*' ''■''•' ^ 

climax,  and  that  by  waitt^a  li  tl  l"'"  f  ''''^'"^  '^''^^ 
-  prices  fall.  But  ^ "L  n  w  Zi/Y  ""'"V"'"'' 
the  laborers  that  this  hope  was IhusC  'nd  T"^'  "'""'  '" 
paign  was  begun  in  earnest.  tL  \\  oZ;,  r  •''"'"  '""'■ 
a  memorandum  on  Januarv  21  Tor.         I  Committee  issued 

j^wh^h  they  prodcrs:;.^^-;.!--:^^^ 

„i  m  r  r     "^         '"''"'  '"  """"ition  trades  a„,l  ,„  ,h,  <„,, 

'  Loftoar  Year  Book,  1916,  p.  4^, 


t;''1i| 


I 


If 


96 


PRICES   AND   PRICE  CONTROL   DfRINO  THE   WAR 


On  January  28,  1915,  the  Workers'  Committee  issued  a 
list  of  recommendations,  among  which  one  finds  "that  maxi- 
mum prices  for  coal  should  \h.'  fixed  by  thegovernment  .  .  . 
and  that  the  government  commandeer  coal  supplies  and  dis- 
tribute to  household  consumers  through  municipal  or  coop- 
erative agencies." 

The  Secretary  of  the  Lal)or  party  was  requested  to  arrange 
a  series  of  district  conferences  to  lie  held  on  February  13,  1915. 

Two  days  before  the  District  conferences  were  held,  a 
debate  took  place  in  the  House  of  Commons  on  the  following 
motion,  which  had  lieen  tabled  by  the  Lalior  party: 

That  in  the  opinion  of  this  Houw,  the  present  rise  in  the  prices  of  food,  roal  and 
other  necessities  of  iife  is  not  justified  by  any  economic  consequence  of  (he  war, 
but  is  largely  caused  by  the  holding  up  of  stocks  and  by  the  inadequate  provision 
of  transport  facilities. 

This  House  is  therefore  further  of  the  opinion  that  the  government  should 
prevent  this  unjustifiable  increase  by  employing  the  shipping  and  railway  facilities 
necessar>'  to  put  the  required  supplies  on  the  market,  by  fixing  maximum  prices 
and  by  acquiring  control  of  commodities  that  are  or  may  be  subject  to  artificial 
coats.' 

Replying  to  Mr.  Ferens,  who  brought  forward  the  motion, 
and  to  Mr.  Clynes,  who,  speaking  for  the  Labor  members, 
demanded  the  fixing  of  maximum  prices.  Prime  Minister 
Asquith  stated  that  there  were  many  causes  which  contrib- 
uted to  the  rise  in  the  price  of  wheat.  The  Australian  crop 
had  failed ;  the  Argentine  crop  was  late  in  coming  to  the  mar- 
ket; there  had  been  much  speculation  in  the  United  States; 
in  addition  to  this  the  closing  of  the  Dardanelles  had  seriously 
shortened  supply,  and  the  war  was  partly  responsible  for  the 
rise  in  freights.'  With  regard  to  coal,  the  rise  of  price  must 
be  attributed  to  high  freights  and  shortage  of  labor.  In  order 
to  improve  the  situation,  the  government  proposed  to  increase 
available  shipping  by  releasing  interned  ships  and  ships  occu- 
pied by  prisoners  as  well  as  by  accelerating  procedure  in  the 
prize  courts.  The  Prime  Minister  refused  to  resort  to  what  he 
termed  "more  heroic  steps     and  pointed  to  the  example  of 

'  Liihour  Year  Book,  1916,  pp.  42-43. 

'69  H.  C".  Debates,  756-758  (762-764),  (juoted  from  The  Political  Quarterly, 
May,  1915.  pp.  157-158. 


OREAT    RRITAIN 


97 


In  commenting  on  the  demand  for  the  fivina  of  «,     • 
prices,  the  Statist  rightly  asks  wh  fhlr    f      ^       maximum 

ana  lucl  prices     This  conference,  which  was  held  on  Marrh 

g  ve'rrenrt:^^^^^^^^ 

prices"  '"'■'  P^'"'  •"  ^^""^••""■•"g  wheat  and  coal 

During  the  subsequent  months  of  iQi  5  nc  ,..,.11   ,    ^u 
the  earlv  n-xrt  nf  i^./-    i  i       " '"  "'  '9'5.  as  well  as  through 

t.on  that  profiteermg  was  rampant  than  f>ecause  of  real  hard- 
Ma?  ."■5^'pp''.?7-7^8"^"^'  '^^'-'^■»^'  ''""''■•^  f^--"  T-A,  /><,/„„«;  (>„a..vr;v 
•The  Sliilist.  February-  11    loie   n   j.e 

'Labour  Year  Book.  191b  p    i,  ^   ^ 

iuAoHr  ie„r  Book,  1916,  ,,4,.       ^^' 


9l  PRICRK  AND   MICK   rONTIIOL   DURING  THE   WAR 

ship  experienced  by  their  members.  Statesmen  in  general  were 
for  letting  difficulties,  if  there  were  any,  be  settled  through 
the  natural  play  of  economic  forces.  The  inactivity  was  jus- 
tified by  pointing  to  the  example  of  Germany,  where  accord- 
ing to  many  British  ob»er\ers  the  fixing  of  prices  was  a  failure.' 
Towards  the  end  of  the  second  year  of  the  war  the  situation 
Iwcame  more  acute.  The  mass  of  the  consumers  began  to  feel 
the  sting  of  growing  prices,  especially  in  case  of  such  com- 
modities  as  fresh  milk,  f'opular  clamor  was  growing  louder 
and  louder  and  the  pressure  exercised  u^wn  the  govei  nment 
stronger  and  more  insistent. 

At  a  meeting  of  the  executive  committee  of  the  National 
l-nion  of  Railway  Employes  held  on  August  2,  1916,  a  reso- 
lution was  passed  demanding  an  increase  in  wages.  I)ecau8e 
the  government  had  not  taken  effective  measures  to  regulate 
prices  of  necessities.*    Labor  delegation  after  labor  delegation 
was  sent  to  discuss  matters  with  the  reprcsr  .tatives  of  the 
Cabinet.    These  delegations  included  in  their  demands  such 
items  as  the  conscription  of  wealth,  the  regulation  of  prices 
and  the  establishment  of  a  normal  relation  between  prices  and 
the  purchasing  power  of  the  population  (through  increase  in 
wages,  pensions,  etc.).     Cries  of  "hands  oflf  from  the  people's 
ff)od"  began  to  be  heard  at  mass  meetings  held  by  laboring 
organizations  throughout  the  country.'     At  the  Trade  Union 
Congress  of  1916,  the  Pariiamcntary  Committee,  which  was 
the  executive  of  the  congress,  submitted  a  resolution  requesting 
the  nationalization  of  all  vital  industries;  this  resolution  was 
carried  unanimously  almost  without  discussion.'     It  requested 
the  appointment  of  a  Minister  of  Labor  and  Industry,  among 
whose  functions  should  be  the  control  and  organization  of 
agriculture  and  food  supply.     This  control  was  to  be  exer- 
cised (a)  through  tiie  direction  of  use  of  all  land,  (b)  through 
the  state's  first  claim  on  the  use  of  all  British  ships,  at  rates 
*hich  would  yield  a  fixed  national  standard  of  profit,  (c) 

vol.^'xTpp'?79  eic'^"^'"'''   *°   '''"    """"^   '"   ^'"^"y"  ^(""omic   Journal, 

!"^°"'"«™nK,'H'8h  Prices.'"  V^tnik  Evropi,  December,  1916.  pp.  257-283. 
»  The  Round  Table,  Oecemlwr,  1916,  pp.  76-77. 


0«KAT   BRITAIN 

•hip.  „f  war  a>  will  :,.„;.;?  .""  ""  material  and 

In  Novcmfw.  when  f.^Kl  prices  in  thr.  I., 
popular-. .n  had  increased  8«  ,kt  cen    a  k.  e    h' "  "'""':•"' 
•n  July.  1914.  the  executive  dmu"    t  P'-^va.hnK 

conference  in  order  ,0  concentrr,e    h'        V""^^"'/  national 
movement  in  certain  Hpfin^»      •       ■       "»''"»""s  *'f  the  whole 

KoMhefir.Si^:;^;:-;!:^:^-:;;l;;-,-ani.a.io... 

=:;  iTerte"'  ^-"f  ~^  <>^^^^^^^^^^ 
23-26,  ,9.7  and  Sh       h  '""^'''■"'^*'  ^■^''  ^^••''  ""  J^'nuary 
Thi.      T'^  *""'*•••  ^-^""""s  were  as  follows: 

rhu  conference,  representative  «.  \iii,.„,i  i  . 
~rningandcon.uming.Wr.  tie,  lare.',h!r  • '  '  "'''•*"'=^^'  °"  '««»>  '««  »»«• 
Jjovemmen.  in  takingV.ion  to  ,  reTl  '"LVS  "''"'""•'  ""•  ■"""  "-'->• "'  '^ 
^ne  during  the  pa.t  two  y.ar./weicolenL  '  "^  "r^V"  "''»'  '"»^*  "'^'''y 
but  U  of  opinio,,  .ha.  , hey  are  inade^u^  ^V.:'*  """  ^'"'^  "°*  ^"  «»''"'. 
to  or,ani«d  Ubor  unle«  i,  ZZ,^"''''  ""'^  ""«  "°  """^y  »'"  he  accep.ahle 

s  tI;:  ~nd:;r^yoTor„^ttr"'''':  ^^  •'"  --— 

o.t..  r^rley.  po.a.oe.  and  n,ilk-  and  in^vrewoHh'""'    "'  '"'^  "  ""''"•  *»'«"• 
dured  by  child-bearing  women  and  v,  1     t-i .  '*"°'"'  P^^ation.  Uing  en- 

•ion  of  .heir  health,  .h"  conTrence  ca  ,  "o'n '.h    '''''  ""^  "^  '^°"'*"""'  ''"'^u- 
•teya   bill  making  it  compXry^rin.vfT""'"'"' '° '"•"^"^■' '■"-"-''■ 

m.lk  for  mother,  and  young  chiE   half  .r  ''^"'  '"  """'"'"  '"""'"  ""'• 
Exchequer;  ""*"•  •""'  ">«= ':°»'  bemg  paid  from  .he  national 

^  (c)  The  commandeering  of  .hip.  and  the  controlling  of  freigh.  and  freight 

t"^^'p£"^hn';nirirr^.t:;«:r^'  -  --ine..  a„d  co„. 

cornumer;  and  the  proportional  rll,i„  "  ^nf    "  ."t"""'"'"  '"'''""  '°  '»•« 
rood.tuff.  in  which  there  i.  a  .hor^fgtofTup,  lie,''""''  '"""•  "'  ""  ^''^  "'  -y 

(e)  The  organization  and  »unervi,iV,n  „f        .      . 
into  their  own  hand,  at  leal    f„7r  ^iln  ,r.   Vr".    "^  ^°^""'"^"'  '"  '""e 
grav.  or  fallow,  inclu.ling  any  .ui.aWe  Ian,.  „       J       "^  *'  "'"*"'  alK.ndon«l  ,„ 
.ufficien,  labor  and  machineo    o  c  liv^.e  Tw  an'.'  "  ^""'^  '"^'"=  '"  ■— 

Si^:^^;:=-;x:;;j&^^ 

r**/Jo«„</  TflA/,.  Decemlxr,  .916.  pp.  76-77. 


1 1 


100 


P«IC  E»  ANII   I'kUe  tllNTMOL   Him  Mi  THE   WAR 


Mich  arranirmrnls  ai  they  ran  (or  Krtting  j>  Urgr  »  propiviion  ai  |iuMll>lr  iiuhr 
rullivalion;  ami  to  atlvaiHi-  rapiial  lo  liHal  aulhortliri,  abo  to  cimiin .ati\-* 
■ocWtira,  to  rna>>lt  Ihem  to  lirlng  aitilitkmal  lanil  into  arable  rultivalkm; 

(0  The  ronfereiire  further  i|rman<<<  that  for  the  period  of  the  war  anil  lix 
montha  aflerwania  the  governmrnt  ihall  (tun  haae  wheal  un  lound  huiinrM  line*. 
and  inaure  that  bread  ami  (lour  shall  lie  »old  ihrounh  the  I'nitetl  Kingdom  at  a 
price  not  euectling  &I.  per  quartern  I<m(i  »u«h  low  at  may  be  incurieil  by  thii 
operation  to  lie  met  a*  a  imrlion  of  the  grnrrul  it»t  of  the  war. 

Further,  in  the  rtpinion  ot  the  cfinfrrentc,  the  ouppty  of  coal  and  other  nece. 
■ariea  of  life  ihould  be  ilr.ili  with  by  the  government  on  linei  aimilar  to  thoae 
indicated  almve. 

Further,  the  government  ohould  approurh  the  governmenti  of  the  allied 
naliona  with  a  view  to  imprewing  upon  th^m  (he  nerewity  of  working  on  tucl.  linet 
that  allie<l  punhaiea  ahall  be  renlrali«e<l  and  competition  between  the  allies 
destroyed.' 

Through  1915  and  1916  the  workmen  confined  themselves 
largely  to  the  passing  of  resolutions,  to  the  criticism  of  scan- 
dals and  to  similar  acts  of  political  agitation.  What  their 
thoughts  and  feelings  were  may  be  gathered  from  the  follow- 
ing excerpt : 

With  the  closing  of  the  foo«l  prices  campaign,  labor  found  itself  economically 
in  a  worse  |josiiion  than  i  .inv  lime  since  iqoo.  The  prices  of  necessities  were 
si  ill  rising:  wages  were  .t.ll,  m  the  main,  stalionjiy;  the  financier,  the  shipowner 
the  railway  magnate  an<l  the  c'nlrac  'lad  lieen  treated  by  the  government  with 
indulgent  generosity;  the  w.^rk-rs  were  still  vainly  knocking  at  the  door.  As  Mr. 
Cole  has  rightly  pointed  out,  "L^bor  alone  has  been  expected  to  make  every 
sacrifice  without  return  or  gratitude.  Employed,  the  worker  was  hande<l  over  to 
the  sweater:  -lempkiyed,  he  fell  into  the  clutches  of  the  Relief  Committee;  as 
consumer,  I  t  the  victim  of  profiteers  whom  the  government  would  not  con- 

trol; but  as  noon  as  he  slirrefl  a  finger  in  his  own  interest,  he  was  proclaime<l  a 
traitor  and  ordered  back  to  work.' 

In  December,  1916,  the  Coalition  government  gave  way 
to  Lloyd  George's  administration,  which,  it  was  expected, 
would  act  with  greater  Iwldness  and  determination.'  On 
June  12,  1917,  Mr.  Lloyd  George  appointed  a  commission  to 
inquire  into  industrial  unrest  throughout  England  and  Scot- 
land. The  rommis.sion  considered  its  work  of  such  urgency 
that  it  divided  itself  into  eight  panels  (corresponding  to  eight 
munition  areas);  they  all  reported  in  a  month.    The  reports 

'  Report  of  the  Sixteenth  .\nnual  Conference  of  the  Labor  Party,  p.  5. 
'  Labour  Yecr  Book,  1916,  p.  46. 

'  ■"*<■  Economist  (Commercial  and  Financial  Review  of  1916),  February,  1917 
p.  289. 


fillKAT   NRITAI.V 

101 

vane  ,  „        „,„^„_^_.P__  r^  ,,-;■•    ».l; 

Pla  nt«     !i'*""*'^^^"«'"•  '"'Kht  have  fn^^n  no  sc-riou,  cm! 
plaints.    The  commisHiontTs  spt^^  fRtiK.rr  of  fh„  r         • 

tr. hute  heaMly  t,.  the  ahm.rmal  advantages  of  thcrrX: 

and  others,  who  by  their  selfishness  secured  Lmensr^an 

from  the  sacrifices  and  sufferings  of  the  poor >'  ^      " 

he  West  Midland  commissioners  stated  that  it  was  ahso- 

lately  necessary  that  the  government  should  take  immed bte 

•c^ps  to  reduce  prices  and  prevent  profiteenng.     ThT London 

.>mm,ssK,ners  recommc^dcl  the  fixing  of  n^aximum  pric    ;   he 

In     add3Thaf"F     ^  ^-'^^»"— --ionersdid'the  same! 

"tensThould  I      ^  ^"nimissioners  suggests  that  either 

life  or  if  /h  '"  '"  '■"'"^■"  *''"  '''''  "^  'he  necessaries  of 

.ft.  or  .f  th.s  were  not  possible,  the  public  should  be  brough 

to  understand  that  the  prev  ailing  hi^h  prices  were  inevitable 

Uu'lle"'?  Na'.l';"'"'.;''  '''""  *""""•   ^'    ^    "^Pa«-nt  of  Labor  Statistics. 

'  Ibid.,  p.  77. 
^■t.  t.™„:  ..|„j„„ri„,  ,.„„.,,.  „,  £„„.,,  j^^^^   ^^^^   ^^^_   ^ 


1 


103 


PRICES  AND   PRICE  CONTROL  DURING  THE   WAR 


The  South  Wales  panel  proposed  among  other  things  that  the 
government  should  stamp  out  all  profiteering  in  food,  and  fix 
the  prices  to  be  charged  by  the  wholesaler,  the  middleman 
and  the  retailer. 

To  meet  these  recommendations  and  thus  to  restore  to  a 
certain  extent  domestic  tranquillity,'  all  the  essential  food- 
stuffs have  been  gradually  brought  under  control,  i.e.,  bread 
and  flour,  meat,  potatoes,  sugar,  tea,  milk,  butter,  cheese  and 
bacon.  Control  has  also  been  extended  to  certain  subsidiary 
foods  such  as  jam,  oatmeal,  dried  peas  and  beans,  chocolate 
and  sweetmeats,  and  also  to  feeding  stuffs  for  live  stock. 

Prices  are  being  fixed  at  every  stage  of  production  and  dis- 
tribution of  controlled  commodities,  from  the  stockyard  or 
barn  to  the  shop  counter.  The  speculative  middleman  has 
been  eliminated,  and  the  charges  that  may  be  made  by  the 
necessary  middleman  and  the  retailer  are  being  defined  and 
regulated  by  fixing  prices  or  profits.' 

These  measures  did  not  bring  the  expected  peace.  Govern- 
ment methods  of  controlling  the  food  situation  were  criticized 
severely  at  the  Labor  congress  held  during  the  latter  part  of 
December,  1917. 

Speaking  to  a  resolution  on  this  subject,  Robert  Smillie, 
leader  of  the  miners,  said : 

I  hope  the  government  will  take  it  that  we  put  this  forward  as  a  grave  warning 
to  them.  If  they  do  not  carry  out  at  once  the  spirit  of  the  resolution  they  may  take 
it  for  granted  that  the  workers  of  the  country  are  no  longer  going  to  stand  having 
their  wives  and  children  waiting  outside  shop  doors,  almost  begging  for  food  to 
be  sold  to  them. 

Dr.  Marion  Phillips,  of  the  executive  committee  of  the 
Women's  Labor  League,  said  that  unless  steps  were  taken  to 
improve  present  conditions  infant  mortality  would  rise  to  a 
degree  which  never  had  been  'nown. 

The  whole  policy  of  the  gv,  /ernment,  declared  Bevan  of  the 
dock  workers'  union,  had  been  to  "play  into  the  hands  of  the 
American  ring.  Talk  of  food  control — there  will  soon  be 
nothing  left  to  control,"  he  said. 

'  The  Statist,  Decemljer  i,  1917,  p.  1120. 
•  Labour  Gazette,  November,  1917,  p.  398. 


OREAT    BRriAIN 


103 


•  CA,.a,o  Tribune.  December  30,  ,9,7. 


CHAPTER  Vn 

Govenunental  Control  and  Price  Fixing 

Food 
General 

After  the  declaration  of  war  there  was  a  sudden  and  rapid 
rise  in  prices  of  necessaries,  particularly  of  foodstuffs.  The 
reasons  for  this  rise  may  be  summarized  as  follows: 

(i)  With  the  mobilization  of  the  British  army  and  navy 
large  governmental  orders  had  to  be  immediately  filled.' 

(2)  Many  householders  with  cash  at  their  command 
rushed  to  the  stores  and  began  laying  .n  supplies  for  weeks, 
sometimes  for  months  in  advance  of  their  actual  needs.'  In 
smaller  places  shops  were  literally  bought  out  by  one  or  two 
purchasers.  This  "frenzied"  buying  was  due  to  fear  that  the 
existing  stocks  in  stores  would  become  exhausted  and  that 
prices  would  rise  abnormally  high. 

Some  dealers  took  advantage  of  conditions  to  realize  as 
much  as  possible  on  the  merchandise  which  they  had  on  hand. 

The  situation  was  aggravated  by  a  temporary  disorganiza- 
tion of  shipping  and  by  the  use  of  railway  facilities  for  war 
purposes;  this  made  it  difficult  for  dealers  to  get  new  supplies 
in  order  to  keep  up  stocks.  Poorer  classes  of  the  population 
who  could  purchase  only  from  day  to  day  as  they  needed 
the  commodity  were  thus  placed  in  an  extremely  difficult 
position. 

That  the  rise  in  prices  was  due  largely  to  a  panic  and  that  it 
was  not  warranted  by  the  conditions  existent  at  the  time,  is 
apparent  from  the  fact  that  the  English  and  Scottish  coop- 
erative wholesale  societies  after  a  study  of  the  situation  sent 
out  reassuring  messages  to  all  their  local  store  committees; 
they  advised  them  not  to  raise  prices,  but  to  restrict  sales  to 

'  The  Slatist,  August  22,  1914,  p.  466. 
'  Labour  Gatette  (Canadian),  May,  1917,  p.  393. 

104 


GREAT  BRITAIN 


105 


;"„t;;,t' '  '"  '-'-''""  «"■  "■*  P-.ou.  average  ra.e  o, 

It  was  soon  recognized  that  tl,;/  ^"'  '"«''  '^^^'^'s- 

or  in  store  for  so'n.  fme  ^o  com!  "a  T^^'  '""^  '"  ^^^^^ 
.•nquiries,  the  government  announced  t^I  T'' ^' r'^' 
wheat  then  in  the  country  uoro  «,.«  •  ""  supplies  of 

consumption  for  five  mon  hTth.  .•" '"''^  ^''^  "''^'"^' 

nearly  twelve  months  The  Mv  "'"'''""  "'  ^^'^'^^^  ^^^ 
fears  of  the  submarine  nienace?"  ''"'  ^"^^'^'^  '^^ 

seas  and  therewith  our  fraSe  rouTe,  "'""  ^"T^"'  ^'  ''' 
rather  for  a  gradual  trend  tr>  w  -'     '     '     *"''  outlook  is 

to  any  appreciable  Z'^  [Tr  '"'"  '°''  ^^""'^'""^  ^^^^ 
statement;  one  wonder^u-h./^  u?'^"'  ^'^'^  «''*^"  f^""  the 
based  upo;  the  thoS  that  tr'"r^"°^^'-^'--- not 
Powers  as  buyers  from  the  worlH'  ^'^^f  ^^'^l  «f  the  Central 
demand  and  thus  Cr  prices"     '  "'''''''  """'^  --^^"^^  ^^e 

When  the  panic  was  at  its  heie-hf  th^ 
sponse  to  an  urgent  demand  f  J  •        «^°^'^''"'"ent.  in  re- 

an  interesting  aLmptToTnfluen"'"' ^  "^*'«"'  '"^de 

••tself  the  resU-blt;:;  fixing"Thr"  "'^'°"*  ^^'^'"^  "P«" 

undeVirciurx^:^^^^^^^^  rmf r "-  ^°°^  --'- 

representatives   of  certain    IrLr  ^^""^^'^'  '"et  "the 

distributing  shops  and   groceJ   fTT"'  "^"'"^   ^'^ 

shops.-.     It  was  decided  thTatandl  J  °""'"^   ^^'""^ 

formed  to  advise  a«;  tn  rZ  •         ^*^"^'"&  commiuee  should  be 

of  food,    rt     pTicesTirnr"'^^^ 
'A„.r-      .         '^'''''"°^"^"'P"'«°'-y.  but  represented 


^ 


lo6 


PRICES   AND   PRICE  CONTROL  DURING  THE   WAR 


,  per 

Statt  \Iaximum,  per 
'uund 

s.  •!. 

nts) 

04J  (  9-1  cents) 
05     (lO.I       "     ) 
I  6    (36.5     ••    ) 
0  91(19-3      "    ) 
08    (16.2      •'    ) 

'         1 

0  10  (20.3      " 

) 

•    ) 

I  6    (36.5      " 
•  4    (32-4     " 

) 

the  opinion  of  experts,  acting  under  governmental  sanction, 
as  to  what  purchasers  might  reasonably  regard  as  the  highest 
figures  they  ought  to  pay.  The  first  list  of  prices  was  issued 
August  7,  to  be  effective  through  the  loth.  These  prices 
gave  rise  to  complaint  that  the  committee  was  acting  in  the 
interest  of  dealers  rather  than  of  purchasers. 

The  following  were  the  home  and  colonial  quotations  and 
the  state  maximum  compared  for  August  7,  1914:' 

Today's  Price,  per 
Articles  Pound 

8.  d. 

Granulated  sugar 03    (6.1  cents) 

Lump  sugar o  3I  {  7.1 

Butter 13    (30.4 

Cheese  (colonial) o  Sj  (17.2 

Lard  (American) 0.7    (14.2 

Margarin 08    (16.2 

Bacon : 

British  (by  the  side) 12    (28.4 

Continental  (by  the  side) 

By  the  time  the  next  list  was  issued  on  August  1 1  current 
prices  had  risen  somewhat,  and  the  maximum  set  on  bacon 
by  the  committee  was  reduced  by  3d.  (6.1  cents)  for  British 
and  2d.  (4.1  cents)  for  continental  bacon.'  Accordingly,  the 
current  and  maximum  prices  agreed,  except  that  the  commit- 
tee's price  for  sugar  was  still  ^d.  (1.5  cents)  higher  than  cur- 
rent quotations.  The  committee  continued  to  issue  price 
lists  for  about  three  weeks,  by  which  time  prices  had  become 
fairly  stable,  though  at  a  higher  level  than  that  prevailing  in 
July.'     The  issue  of  price  lists  for  meat  was  resumed  early  in 

1915' 

On  August  10,  1914,  the  presidents  of  the  Board  of  Trade 
and  the  Board  of  Agriculture  and  Fisheries  met  a  number  of 
representative  millers  to  discuss  the  price  of  flour,  and  it  was 
arranged  to  have  a  standing  committee  of  the  millers  to  con- 
fer with  the  government  from  time  to  time.'  A  conference 
was  also  held  with  representatives  of  the   Meat  Traders' 

'  The  Daily  Citizen,  Saturday,  August  8,  1914. 

'  Labour  Gnzrtle,  August.  1914.  p.  283. 

"  U.  S.  Bureau  of  Labor  Statistics,  Bulletin  No.  170,  pp.  12-13. 

*  Labour  Gazette  (Canadian),  ^lay,  i<)i7,  p.  396. 

»  Board  of  Trade  Journal,  August  13,  1914,  p.  419. 


GREAT    BRITAIN- 


107 


Association.    The  prices  of  flour  were  fixed  AuRu.t  ,-    ,om 

ancf  ^hr^r"-   "'^"^■^"  ''''  ''^''^'^^'"'  "^  ^'^-  «-  '  'VT?a  t 
ana  the  millers  committee'  •  r-iue 

ners       NKHlstuffs  «as  proMclerl  l,y  the  passage  on  .August  10 

the  ArfirW  Jr         ^  •  <^'';  5').      The  act  was  repealed  by 
ixt  ."vriic'es  ol  I  ommen-e  \rt   ^,-u;,.u  1  i         v.   .,j, 

2S  ini  w.  J  11  ,.  *^^^'  """"  l)ecame  law  on  .\uKUst 
2«.  1914  (4  and  5  Geo.  \\  ch.  65).  This  latter  -..t  ■  .  ^"^^ 
nature  to  the  first  one,  authorised  the  Cdf  7^' '"r 
authorized  ,.y  proclamation,  to  take  p^'le!  on  ./  J  IT  [des 
of  commerce  unreasonably   wiflihr.w     ..  •'•">  articles 

Tder  thi^^  /       "^  '^"■'^^'''  ^"  ^^'^^  P"«^««i«n  -^  articl^ 
under  this  act  was  exercised  bv  f  h*.  n^f„„      r-         ■ 

persons  authorized  by  Tm  (iarrf^f  ^"1^    7"'?";  ""^ 
ber  15.  1914.  p.  162).  "^  ^"^^  •^'""''^^'  ^^'^f^- 

It  does  not  appear  that  the  power  eranterl  bv  th;.      .  u 
ever  bee"  s,«lfi.a„y  exercis-S!    OoTp"  t  V,v,^rbL'„' 

and' «:  ;r^,7rA"^ ";'  -'' '-  "^  '-•- '"  -^^ 

that  there  hLT^  Agriculture  and  Fisheries  declared 

mat  there  had  been  no  improper  withholdi„B  of  supplies  ' 

br;:T7,he'trr  S^^^'l  ^ cT™'  'l^  ' "' - 

country    „erc  obtained,   and   arrangements  made  t,  r     h! 
pc™d,ca  collection  of  this  inf„tmatio„.    sL.n  a  ,t  t  ^  out 
heel      A     "T  "■"""  "'  '"^^  ""^  P"'''"*ed  excep,  under 

i-or  the  purpose  of  maintaining  the  country's  food  supply, 

Ibil..  January  14,  ,9,5,  p.  ,00  ^  •*'  P'  •+''5- 


f 


io8 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


M   P 


a  plan  for  state  insurance  of  ships  and  cargoes  was  hastily 
devised  and  adopted.'  In  the  case  of  ships  the  government 
was  to  insure  all  war  risks  at  a  flat  rate  of  premium  ranging 
from  I  to  5  per  cent.  For  cargoes  a  special  insurance  depart- 
ment was  set  up  with  an  advisory  board  to  fix  the  rate  of 
premiums. 

Among  the  other  early  steps  taken  by  the  government  in 
connection  with  the  control  of  food  were  the  appointment  of 
the  Royal  Sugar  Commission  and  the  establishment  of  agen- 
cies entrusted  with  the  purchase,  shipment,  ,  orage  and  dis- 
tribution of  meat,  wheat  and  flour.  Excepting  these  measures, 
the  government,  during  the  first  two  years  of  war,  followed 
largely  the  plan  of  not  interfering  with  production,  distribu- 
tion and  prices  of  foods.  Toward  the  end  of  191 6  the  poor 
harvests  in  North  America,  South  America  and  Europe,  the 
increasing  shortage  of  tonnage  due  to  commandeering  by  the 
government  and  losses  by  submarines,  the  growing  discontent 
of  the  people  with  what  they  considered  governmental  neg- 
ligence, the  rapidly  expanding  indebtedness  and  the  necessity 
to  pay  high  prices  for  all  that  the  government  was  buying, 
the  inability  to  forecast  how  long  the  war  would  last  and  the 
certainty  that  if  it  lasted  much  longer  Great  Britain  would 
experience  great  difficulties  in  bringing  food  into  the  country, 
all  influenced  the  government  to  change  its  policy  for  that  of 
strict  measures  of  control. 

Accordingly,  on  November  16,  December  5  and  December 
22,  1916,  Orders  in  Council  were  issued  which  amended,  with 
this  aim  in  view,  the  regulations  (called  the  Defense  of  the 
Realm  Consolidation  Regulations,  1914)  under  the  Defense 
of  the  Realm  Consolidating  Act,  1914.  These  orders  gave  the 
Board  of  Trade  wide  powers  to  control  any  "articles  of  com- 
merce, the  maintenance  of  which  is  important-  as  being  part 
of  the  food  supplies  of  the  country,  or  as  being  necessary  for 
the  wants  of  the  public."^    The  Board  of  Trade's  orders, 

'  U.  S.  Bureau  of  Labor  Sutistics,  Bulletin  No.  170,  p.  14. 

'  Monthly  Review  of  the  U.  S.  Bureau  of  Labor  Statistics,  March,  1917,  p.  397; 
see  also  Board  of  Trade  Journal,  November  23,  1916,  pp.  566-570;  December  14, 
1916,  pp.  795-7&S.  and  December  28,  1916,  p.  945. 


GREAT  BRITAIN 


109 


under  the  regulations,  "may  be  madp  pWh«. 

of  difference,  by  the  Board  of  r.S\      \  *^^''-  '"  "^"^^ 

Trade  ,he  powo^:  .0  "q^M.t^upSic,  '„f  "^fi  "T"*  °' 
tion  a.  to  stocks,  .0  hold  inau£  'l'  'iT  ,'"'"™''- 
fixing  orders  issued  by  the  B  »T'  r  T  J  .  ""'>'  P""" 
..^  orders  reguUting'tlpricf^^^^il-k'  ^'"'  """"  "- 

regulations  adoDt^  fo7?h!       *       administering  the  new 
and  prices  „?3/:*Jr;^i!<'™'r°"'"8  ™PP"e. 

-^:tu^:r;^;d:-£Sr'^^^^^^^^ 

on  December  33  10./;  u  ,.  L  ^'^^"^-  '  "•«  was  done 
retarie.  Act  (6  and'  G*7''=  ^^"\"i-<™  ="'1  Sec 
act  authorized  the  KiL  fS'ti:  '  **''  ""  P»'^'  ^he 
maintaining  the  foS  Lpl  ^"r''  °'  -""■""-■"8  and 

.oodC„„tro„er,.he,atte^^'^hl'Xrdrn^,^./.^^^^^^^ 
encourage  its  production  oi  lood  as  well  as  to 

outbreak  of  the  war  were  so  amended  as  to  confer  on  the  F<Ld 

■  A..„M/,  ;e„,>.  of.,e  i,  S.  Bureau  of  La^.r  S.„sU.s,  March,  .,.,  p.  3,3. 


!f! 


I 


J 


I 


no 


PRICES   AND   PRICE   CONTROt   niRINCi   THE   WAR 


Con 'roller  some  of  the  powers  which  heretofore  were  vested 
in  tiie  Board  of  Trade.  The  new  regulations  give  the  Con- 
troller larjj"  jtionary  jiowers  with  resfwct  to  the  issue  of 
orders  .  .ig  the  production,  manufacture,  treatment, 
storage,  i...,iril)ution.  supp.y,  sale  or  purchase  of  any  article 
(including  orders  a«  to  maximum  ;.nd  minimum  prices). 

The  F"ood  Controller  may  take  over  from  private  possession 
any  goods  on  such  terms  as  he  may  direct,  where  it  appears 
to  him  necessary  or  expctlieiit  to  do  so.  He  also  can  demand 
information  from  every  holder  of  stocks  of  gcKKls  as  t<'  the 
amount  held,  price  p£\id  or  received,  cost  of  protluction,  etc. 
He  may  establish  control  over  any  frnwl  producing  factory  or 
workshop;  the  occupiers  of  every  ^uch  factory  must  then 
comply  with  his  directions  as  to  the  management  and  use  of 
premises.  He  is  given  power,  in  conjunction  with  the  Board 
of  Agriculture,  to  take  possession  of  any  land  improperly 
cultivated  and  take  any  machinery  or  farm  stocks  which  may 
be  required  for  the  better  cultivation  of  such  land.' 

The  amended  Defense  of  Realm  regulations  confer  upon 
the  Board  of  Trade  powers  similar  to  those  exercised  by  the 
Food  Controller  regarding  any  articles  to  which  the  latter's 
powers  do  not  extend. 

The  first  work  undertaken  by  the  Food  Controller  was  to 
take  a  census  of  the  stock  of  food  on  hand  and  to  estimate 
the  visible  supply  of  important  commodities.' 

It  is  difficult  to  see  from  subsequent  orders  of  the  Fond 
Controller  of  what  benefit  to  the  Administration  was  this 
preliminary  step,  so  essential  in  any  comprehensive  scheme  of 
price  fixing.  There  does  not  seem  to  have  been  any  definite 
rule  of  conduct,  any  thought  out  plan  of  action  in  what  Lord 
Davenport  did  during  his  tenure  of  office  in  the  first  part 
of  191 7.  Order  after  order  was  promulgated,  only  to  be 
amended  and  hastily  reamendcd,  without  serious  considera- 
tion of  the  problems  involved.     In  Lord  Davenport's  defense, 

'  Defense  of  the  Realm  Manual  (4th  Enlarged  Edition),  May  31,  1917,  Regula- 
tions 2F  to  2J. 

'  British  and  Canadian  Food  Regulation,  65th  Cong.,  1st  Sess.,  Senate  Doc  No 
47.  p.  17. 


GREAT   BRITAIN-  j^ 

one  may  say  that  the  office  of  the  F«kkI  (\,n»r..ii 

ment  was  much  more  careful    th  ""^^t '  '»>  «>«  his  apixunt- 

that  of  his  precleres<,r     Hi      .""*''''  ''"''  '*y'^»'''"-'"V  than 

to  the  retailer-  in  th  "1/  ^"-''^^"^  ^'■""'  '^"^  ■"••"■"'•^■•-  'l"«n 
far  as  Zm    h  ''^'7'"'"^"""  '>f  Prires  he  follou.,|  as 

profit  r   h  '  ^"V^'  "^  """"  '■"^'  ^  reasonable,  prew  r 

acco„„,a„,.,  has  been  „t  „p,  ,h„„,g|,  „,,i^^  ,|,^  ^^^^^^  __^^^a 
■9  r^pi.^*".'"""""'- ^"''""'  '»"■ "  »'^ ■" "i«  n,  £„..„„,  j„i, ,, 


113 


PRICES  AND  PRICE  CONTROl    Dl'RINC  THE   WAR 


by  any  manufacturer  «»r  retailer  of  food  can  Ik?  ascertained. 
The  country  has  Ix-en  divided  into  separate  areas,  in  eac':  of 
which  a  responsible  firm  of  accountants  has  lieen  appointed  by 
this  department  to  do  the  necessary  work.  ReaiMHiahle  profit 
based  on  prewar  rates  is  added  to  the  present  cost  and  price 
limits  agreed  on  that  basis,  after  consultation  with  the  repre- 
sentatives of  the  trades  concerned. 

Decentralization  is  obtained  bv  dividing  Great  Britain  into 
sixteen  food  divisions,  consisting  of  so  many  counties.  Each 
division  is  under  the  sui>erintendence  of  a  commissioner  ap- 
pointed by  the  Fo<k1  Controller.  In  each  of  these  divisions 
the  l)orough,  urban  or  rural  district  councils,  or  other  local 
authorities,  appoint  local  food  committees,  with  limited 
powers  and  certain  discretion,  to  carr\  out  such  regulations 
as  regards  price  and  distribution  as  may  be  issued  from 
headquarters. 

Local  tradesmen  are  registered  with  their  local  committees, 
and  if  any  tradesman  does  not  carry  out  regulations  and  orders 
he  may  be  struck  off  the  register  and  prevented  from  further 
trading.  The  various  orders  fixing  or  amending  the  maximum 
prices  of  meat,  milk,  potatoes,  bread,  etc.,  are  communicated  to 
the  local  committees  and  the  trades  and  the  public  are  informed 
through  the  daily  and  trades  press.  A  staff  of  inspe.  tors  is 
kept  at  headquarter^  and  a  number  of  sentences  have  ueen 
imposed  by  magistrates  throughout  the  country  for  contra- 
vention of  the  regulations.  The  general  penalty  is  a  fine  not 
exceeding  £ioo  ci  a  term  of  six  months*  imprisonment  with 
or  without  hard  lalxjr,  or  Ixjth.  This  punishment  may  be 
inflicted  according  to  the  offense. 

Lord  Rhondda  made  also  arrangements  as  rapidly  as  |X)s- 
sible  for  securing  control  of  all  imports  of  foodstuffs  in  coop- 
eration with  the  American  and  Canadian  food  controllers.' 

An  Order  in  Council,  dated  June  28,  amended  the  Defense 
of  the  Realm  Regulations.  Among  other  amendments,  it 
conferred  on  the  Food  Controller  the  same  powers  as  were 

'  H.  S.:  "Early  Phases  of  Food  Control,"  The  Edinburgh  Review,  Januar>',  1918, 
p.  120. 


CKEAT   BRITAIN- 


«I3 


I9I7  f\o    «r^^  .    tL-  ''"';  '^'*'  ^  '""«•<»'  <  ommittiTs  Order, 

nihilities  with  regard      .S  ;"  J,"  ^7,7"  «'-''"  -P<-; 
fo<Kl  control  commit...       "*'"  »'"^*^^-      '  "i'  apjxMntnient  of 

necessary  fmKlstuff^     Th.  •  ''"^^''* ""  "^any 

enf,.rcem'^^nro  thl  sc  le  hr'"'"  7"  ^'"'^"^'•"'  ^^  '^'^  '^' 
any  mcKlificatiLn^rr  ha  maX'  t"  "'"\'"  "'"■^^'  "" 
in  their  (hstricts  ^         '''"'""  "'  ''^^  ""essary 

Ho.  a  survey  of  the  orders  issued  by  the  F<kx1  Controller 


«I4 


PRtrM  AND  niCR  CONTROL   DURINr.  THR   WAR 


it  apiM-arn  that  at  the  U'Kinning  of  HjiK  all  lhi>  prim  ipal  f<HNl- 
•tuffn— hri-atl.  meat.  milk.  luitttT,  chws*'.  fMitatiH-s,  suKar, 
tea  and  haron— havo  Inrn  hr<)U|{ht  undor  tontrul,  while  hxc<I 
pricvn  also  ruli-  in  ri'KanI  to  many  articli's  of  s«-«m(lary  im- 
p«>rtantT.  such  as  driwl  iK-an,  iM-ans,  ria-,  «*aKo,  tapitM'a,  oat- 
mi-al,  jam.  swct'tmcats  and  chm-olati-.'  The  coni-umpticm  of 
meat,  butter,  margarin  and  su^ar  U  controlled  by  cards. 
The  consumer  must  select  his  retailer  and  the  latter  receives 
supplies  fc»r  distribution  according  to  the  numlwr  of  his 
customers. 

Sugar 

The  only  f«KKlstufT  the  supply  and  distributiim  «)f  which  the 
goNfrnnunt  undert(N)k  to  coiitrf)l  from  the  earliest  stages  of 
the  war  was  sugar.  The  reason  for  this  action  was  the  sudden 
disi-ontinuance  of  im(M>rts  which  in  normal  times  came  largely 
from  (iermany  and  other  Kuropean  countries.  On  Septem- 
ber II,  1914,  a  Royal  commission  was  appointed  to  "purchase, 
sell  and  control  the  delivery  of  sugar  on  t)ehalf  of  His  Majes- 
ty's government"  anti  generally  to  take  such  steps  as  would 
be  necessary  for  the  purpose  of  maintaining  supplies.'  One 
of  the  first  things  the  government  did  was  to  buy  up  stmks 
all  over  the  world,  particularly  in  the  F-ast  and  West  Indies.* 
During  the  latter  part  of  September  and  in  OcioImt,  the  corn- 
mis  'on  u  rthastd  !•>  private  negotiation  over  9<h),oo<)  tons 
of  sugar,  raw  and  refined.  These  large  purchases  were 
prompted  by  fear  that  sugar  prcnluction  on  the  continent 
of  Europe  would  cease  and  that  all  countries  would  have  t<i 
de|H>nd  u|H)n  the  cane  sugar  output.  While  the  British  Gov- 
ernment was  buying,  the  price  of  sugar  in  the  world's  markets 
more  than  doubled:  the  price  dropped  again  as  mmiu  as  the 
commission  withdrew  from  the  market.  The  sugar  was  sold 
by  the  commission  to  refiners  at  a  fi.xed  price  which  protects  1 
the  government  from  loss,  at  the  same  time  making  it  possible 
to  retail  the  sugar  at  3id.  (7.6  cents)  per  pound  for  granulated 

'  The  Slalhl.  DoremlHr  I.  1917.  p.  luo. 

'  Board  nf  Trtide  Jourruil,  Seplenil)er  24.  1914,  p.  810. 

*  Labour  Gasfllr  (C'anadiun),  May,  1917.  p.  396. 


(iRKAT   HNIT.UN 


«"S 


"Ugar  and  4J.I.  U).,  „.nts)  for  wmkI  iuIm.«i  ,1.  , 

"aviriK   ..uuh.  .u,,|,li.,  at  a  hwh,-,  ,,„,■,■  ihaa  ih  „  .hi.h 

uKur  ustrs    ,,  pa>  hiKher  prues  than  th<.sf  that  w..iil,l  h  iv.. 

'"rKrnn;'''""'.?''-""'"^'"'"'  '"-^—  »  -  r 

AicKcnnas  Kambe  in  vnanr  "  .1,.. 
frr.™  .k  I  f.        '         '*"Kar.     thi'  eonsiitmTs  wtn-  rut  off 

from  the  world's  supplies,  wrote  the  Sbectalor  »     Th!  . 
sion  acknowlwlgi^  that  there  hVv..i-"       ""'""'""»»- 

Tave  usuT,r:th  """V-  ?'  ''"^'  "■•"*'^  '''^  """•^- 
often  T  he  result  of  transient  influences  (in,  ludinj. 

often  the  commission's  own  absence  from  the  mark..  )  Id 
have  lK*n  no  true  indication  of  what  prices  would  h-ue  r.de 
under  normal  conditions."'     M,.  Layl.n  thinks    ha    i,  v    w 

abl     to"bLm'"7h"^  ''"  ""''"^"^  ''  "'^'  -^  '^  -  -  ".-  n- 
E  entsple^that','":"'""'"^'"'    '"'   '^^^'"^    '''''-'    -«■-• 
m  Europe     If.  however,  the  commission's  fears  were  iusf  fi...l 
England  "might  have  kn-n  very  hard  hit."*     Th"     ^  lu     ' 

deci.,.  w_.,,--:- ;:r'l 

w  nic  h  the  decision  was  executed. 

whll!'  f"^""'  '■'""'"''*^'"""«  «<heme  of  distributing  sugar  to 
wholesalers  was  based  on   the  distribution  of   ,,.5   Tn  a 


Hi 


I 


Il6 


PRICES   AND   PRICE   CONTROL   DURING   THE   WAR 


memorandum  issued  in  January,  191 7,  the  commission  laid 
down  that  the  British  refiners  should  continue  to  issue  sugar 
only  to  their  1 91 5  customers,  the  quantities  issued  to  be 
proportionate  to  those  of  1915,  the  proportion  varying  from 
time  to  time,  in  accordance  with  the  general  proportion  wh-Vh 
all  available  supplies  bear  to  the  total  quantity  used  o;  dis- 
tributed in  191 5.  The  sugar  commission  was  to  contin  ^  to 
distribute  sugar  at  its  disposal  to  its  1915  customers,  g.  iiu; 
each  as  his  share  of  available  sugar  the  amount  proportioi.alL 
to  his  total  use  or  distribution  in  1915,  of  all  sugar  other  than 
the  British  refined.  Wholesale  dealers  were  instructed  to 
distribute  to  their  customers  on  the  same  principle,  that  is 
to  say,  to  let  each  of  their  customers  of  the  year  191 5  have 
his  equivalent  proportion  of  the  available  supplies.' 

The  commission's  selling  prices  to  wholesalers  have  been 
fixed  with  a  view  to  earning  returns  which  should  do  no  more 
than  cover  all  expenses  of  the  commission  and  provide  an 
adequate  margin  against  contingencies.  In  connection  with 
the  control  of  retail  prices  the  means  possessed  by  the  commis- 
sion have  been  only  slight,  but,  according  to  the  commission's 
report,  they  appear  to  have  been  generally  effective  up  to  the 
end  of  1916,  though  less  adequate  to  the  increased  difficulties 
in  the  latter  part  of  that  year.^ 

The  plan  thus  adopted  by  the  commission  was  to  sell  the 
sugar  to  grocers  at  a  price  much  below  that  which  would 
have  prevailed  in  an  unregulated  market;  the  sugar  was  sold 
in  the  proportions  in  which  the  total  was  divided  just  before 
the  war.  The  government  insisted  on  the  grocers  selling  sugar 
at  retail  prices  corresponding  to  the  wholesale  prices  charged 
by  the  government. 

The  distribution  was  entirely  out  of  date.  There  has  been 
so  much  shifting  in  the  population  since  the  war  that  many 
parts  of  the  country  w  ere  receiving  an  excess  supply  of  sugar, 
while  other  ireas  (munition  plant  districts,  etc.)  were  under- 
served.'     In  the  early  part  of  1917,  a  joint  committee,  repre- 

'  Monthly  Rnirw  of  the  V.  S.  Bureau  of  Labor  Statistics,  June,  1917,  p.  9^6. 

*  Labour  Gazette,  Octolxr,  1917,  p.  359. 

•  E.  Cannan:  "Inclustrial  Unrest,"  Economic  Journal,  December,  1917,  p.  936. 


GREAT   BRITAIN 


"7 


sfnting  the  Parliamentary  Committee  of  the  C^ 
Congres.  and  the  War  Emergencv  WWL      •  v  ^^^P^''^^'^'^ 
mittee.  submitted  to  the  S  Con  rol  '""""'  ^"'"- 

suear.     It  ivas  pointed  out  thi,  "",.    '""""^  <li»lriliuiH,n  of 
membership  of  the  cZerat  v.  '     ^"°^'  '""'"'  '" 

— r;-rper^:^^3r=- 

arrangentent,  had  l,een  ,.ade  to  mee       en    :"';■;'  ■""'"" 
those  places  where  fhor,.  h.       i  ,        '"creased  demand  in 

lation  .     rt  "■  ''''''"  '^'■S^^  adfhtions  of  „on« 

lation."     The  attention  of  the  Contmllr-r  „„      i  ' 

course  adopted  by  some  retail  grocerlofs.  T  """  '"  "^ 
to  those  persons  who  fx,ugh  som  o  h,l  •«"'  ""'"  •'"'^' 
The  public  was  finding  th!.e  Z  i  iond  T  "'""^"'"^>- 
annoying  and  just  as  expens  ve  a  i^.t        "        '"-'"venient. 

ruit     as  in  1913     could  not  be  aoDlied-  thit      ir 
amount  thev  asked  fnr     tu-  ,  ,  ,      "*-"   *"<^'"   whatever 

Daven^t.  administration  d^n^orltrh:  LTu^l'lt' 


J 


k 


iii 


Il8 


PRICES   AND   PRICE   CONTROL   DURING  THE   WAR 


this,  and  therefore  refused  to  yield  to  the  popular  clamor  for 
compulsory  sale."' 

The  Northwestern  Commissioners  in  their  part  of  the  Re- 
port on  Industrial  Unrest  state  that  if  other  necessaries  of 
life  are  to  be  controlled  and  distributed  as  sugar  has  been 
controlled  and  disttihuted  in  the  past  the  position  would 
become  exceedingly  dangerous.'  They  consider  that  the  real 
value  of  the  experiment  with  sugar  was  to  use  it  as  an  example 
of  how  not  to  do  it. 

Three  orders  relating  to  sugar  were  issued  by  the  Food 
Controller  in  February,  191 7.  The  Dealings  in  Sugar  (Re- 
striction) Order,  dated  F"ebruary  9,  191 7,  prohibited  private 
dealing  in  sugar  outside  of  the  United  Kingdom.  The  two 
other  orders  considered  brewers'  sugar.'  On  March  16 
manufacturers  were  limited  during  the  year  1917  to  the  use 
of  40  per  cent  of  the  sugar  used  by  them  for  manufacturing 
purposes  during  191 5.  The  order  applied  to  all  articles  ex- 
cept jam,  marmalade  and  condensed  milk.*  The  shortage  of 
sugar  led  to  the  issue  of  two  new  orders,  one  in  April  and  the 
other  in  May.  The  April  Order,  for  the  purpose  of  releasing 
for  domestic  consumption  sugar  of  a  better  quality,  permitted 
manufacturers  other  than  brewers  to  use  brewer; '  sugar.' 
By  the  Sugar  (Restriction)  Order  No.  3,  1917,  the  Food 
Controller  has  reduced  the  amount  of  sugar  whic*-  Id  be 
used  by  the  manufacturers  from  40  per  cent  used  .  1  in 

191 5  to  25  percent.' 

Of  special  interest  is  the  Food  (Conditions  of  Sale)  Order, 
1917,  which  came  into  effect  on  March  23,  1917.'  It  con- 
tained a  clause  that  "  in  the  sale  or  proposed  sale  of  any  article 
of  food,  no  person  may  impose  or  attempt  to  impose  any 
condition  involving  the  purchase  of  any  other  article."  It 
was  particularly  directed  against  grocers  who  made  the  sale 


'  Cannani  op.  cit.,  p.  467. 

^  Industrial  Unrest  in  Great  Britain,  U.  S.  Bureau  of  Labor  Statist 

■  45- 

'  Board  of  Trade  Journal,  February  15,  1917,  p.  484. 
'  Ihid.,  March  22,  1917,  p.  770. 
'  Ibid.,  April  s,  1917,  p.  18. 
"  Ihid.,  May  24,  191",  p.  41 1. 
'  Ibid.,  March  29,  1917,  p.  811. 


No.  237 


GRKAT   BRITAI.V 

tant  measure,  the  new  su^r^J L/rff'  7  '"T '°  ''^^  '^^^  •'"J'<^'-- 
'•s  largely  an  adaptatlnff  ht^^"'""  '^^'^^ "  '^'^^  ^^eme 
sion  of  Incuiry  fnto  Indus  rfarLnr^^T^  'j  the  Commis- 
'"■•-'•oners).  ITnder  th^  plan  \Z  ^^"'''^'^''^''^'^  Com- 
Provide  themselves  with  suea'  ;Ji  ,  "T"  '""''"'"^'■^  "^"^^ 
are  free  to  deposit  witran/Sr Thev"."'''^^'  "''■^''  ^''^>' 
have  chosen  the  retailer  the  v  ho  '^  '"''""'^-    ^^^t^"-  they 

receives  the  allowant    '^,    ^^^;,;;^^  ^ 

With  him  and  from  no  other  erTr  ^^  "^''^  <lep<)sited 

The  retailers  were  forb  dden  T  ^"^  '"^'^'^  ''^  '^""ght. 

unless  thev  held  cert  ficate^^?;".f'  ^"^"  "^'^•'-  ««"''-  ' 
their  local  Food  Contfd?;:  X""-?;?^^";^^  ^'^  ^'^^  ''^ 
to  be  employed  after  January  ,g,8  Th  T'"'"  '^^'^^" 
that  cheap  sugar,  a  gift  of  taxna;.  rsf  '"''"'"'^  ^^^^""-^^ 

reach  them,  the  taxpayers  as  Profe        r^""  ^■""^""'"«.  will 
ing  in  addition  to  pay  the  cos  of  '  ^^""^"  ^"^^  •*'  ^^v- 

indiscriminate   chariK!  •'     u  '^^[f ''"'"'^tenng  this  somewhat 

would  do  away  with  congest  on  T      ""^^   *'''^   ^''h^'ne 

n;unicipalities,registZfr  tru:Zt^r^;''^^^ 
always  out  of  the  reach  of  fh.  ,  '  ^'"''"'^  "^''^  was 

income  of  .os.  a  month  Lvn'P'  T""'  ^'"^^"  ^^•'*''  ^  f-n^'-'y 

Th..  nun,ber  of  tho""  who  ht  ?       '  '"  "^^  ™"^--''  -'"< 

^rew  I.       .  and  la^e     :  "1/"  '""  "'^  ^"^'^  '""k  ^-iually 

ehminat^on  of  milkfrom  th      iT"  ^  '•  '"""'"'^'^  ^'^^^  ^^e 

children   and   thus    nTres  th        '"•"'"  ''^'  '^^^'^^  "^  ^^e 


i 


130 


PRICES   AND   PRICE   CONTROL   ni'RINr.   THE   WAR 


country  which  prompted  the  government  to  revise  its  policy 
of  non-interference  with  regard  to  the  price  fixing  of  foods. 

An  Order  in  Council  (No.  792)  dated  November  16,  191 6. 
gave  the  Board  of  Trade  power  to  adopt  special  regulations 
for  the  maintenance  of  the  f(M>d  supply,  including  the  power 
to  fix  prices.'  Under  this  authority  the  Board  of  Trade  an- 
nounced on  November  23, 1916,  maximum  and  minimum  prices 
for  milk,  sold  in  wholesale  and  in  retail  trade.'  This  order 
was  amended  by  an  order  issued  on  December  12,  1917,' 
under  the  authority  of  the  Food  Controller,  to  whom  were 
transferred  by  the  Order  in  Council  of  January,  191 7,  the 
powers  of  the  Board  of  Trade  relating  to  the  food  supply. 
Under  this  new  order,  the  price  of  milk  was  not  to  exceed  by 
more  than  a  specified  amount  the  price  in  the  corresponding 
month  before  the  war.  This  amount  was  2d.  (4  cents)  per 
quart  for  retail  milk  and  from  s^d.  (11  cents)  to  6id.  (13 
cents)  per  imperial  gallon  for  wholesale  milk,  the  latter 
amount  if  milk  was  delivered  on  the  premises  of  the  buyer 
and  these  premises  were  not  used  as  a  creamery  or  factory. 
The  maximum  price  for  "accommodation"  milk  was  raised 
to  Is.  8d.  (41  cents)  per  imperial  gallon,  inclusive  of  all  charges 
for  transport  to  the  railway  station  at  which  delivery  is  taken 
by  the  purchaser.* 

Contracts  for  the  sale  of  milk  made  on  or  before  Novem- 
ber 15,  1916,  were  allowed  to  remain  valid  for  their  full  period 
(up  to  April  I,  191 7)  even  if  the  price  stipulated  exceeded  that 
otherwise  permissible. 

This  milk  order  was  amended  by  the  Price  of  Milk  Order, 
1917  (No.  68),  dated  January  26,  1917.  The  general  effect 
of  the  new  order  was  to  provide  that  the  retail  price  of  milk 
in  any  month  should  not  exceed  the  retail  price  in  the  corre- 
sponding month  in  the  twelve  months  ending  March  31,  1914, 
by  more  than  2d.  per  imperial  quart,  subject  to  certain  excep- 
tions.'    The  Price  of  Milk  Order  (No.  2),  191 7  (Order  No. 

'  Supra,  p.  108. 

'  Board  of  Trade  Journal,  vol.  95,  p.  570. 
'Ibid.,  p.  861. 

*  Monthly  Review  of  the  Bureau  of  Labor  Statistics,  March,  1917,  p.  388. 
^Defense  of  the  Realm  Manual,  4th  enlarged  edition.  May  31,  1917,  pp.  305- 
309;  see  also  Labour  Gazette,  February,  1917. 


GREAT    BRITAIN 

I6()).  datt'd  Fehruarv2o   loir   v-n.:     t 

orders  with  regard  t^;  ZZliJ^^'T"'  ''''  ''--■"-  -''k 

he:^<r:;::;;:n^:Xl-  •^--^  --  -"er  a  ..app.. 

the  maximum  price  o"  mfik  ,n  th"  '"''"""'  '^^^' 

to  be  6^d.  per  imperia    TaL  above T""  "   '^^^   -- 
armer  obtained  in  the  summe:  of     Y3   o    ^rdd    "'  /'^ 
the  premises  «f  the  huver  nr  ^t  tU         7  ^''-livered  at 

buyer,  under  a  con  ract  to  sunn L  '  •'  ""'  ''""""  "^  ^^e 
case  of  milk  sold  unt  ,t  e  -St^o::".':?  ''"^"'^^-  '" 
charge  more  than  s4d   oerl^.  I  '  l'"  ^^'^""'^  "'"'^  not 

"ler  of  ,913     Anv  one  rl  "'  '^''  ^'"'''  "^  ^^e  sum- 

the  maxi'mu'm  t^^gXT:  stm^'  '  T'  ''''"'  ^^^ 
Tint  *»,„  K""iy  01  a  summary  offense  • 

I  hat  the  government  itself  recoemVprl  tU    ■  • 

and  inexpediency  of  m^yiJ!.  '"^"^"'"^  ^he  impractica!,ihty 
feared  the  effect  of  urr'  .1  ^  •  ^"'"^  ^""^  '"'"^  ^"''  that  it 
seen  from  the  act  tC  sh^v  T  T"  ^"''"^^■"^  •"^>'  '- 
•ast  two  orders  th  Pre'iS  of  7h  ^'T^'f ''""  ''  '"^^ 
and   the    Secretary  for  ScoXnH    r%      T"^  ''^  '^Kriculture 

Controller  and  agrLl  to  t^,e  Ml  '"''"''  ^"'*''    ^^'^    ^«^^1 

^^  agreed  to  tne  following  statement  • 

make  the  maintenance  „f  n,ilk  prod..c^r L"  a"  .IT  ™"'™'':'  '•"'^■'■''  «'  -  '" 
con,par,son  with  other  branches  of  the  fZ^nHnd":':;"'"*'""''^  '"'""''''  '" 

orders  were  promuSYhtrZun:"   T   '''J  ''' 
basing  the  increase  in  nrices  of  n.-^!,  amendment 

1914  instead  of  thoJ^of  ,g  ,      th  '«  the  summer  prices  of 
for  April   5    ,017    conifn  ^.'''^  ^««'''' «/ 7^^«'/'- -/o«^«a/ 

the  President  of    hX:i^?A°'^"/''^^  ''  ^''^'  "-"'"-^  "^ 
for   Scotland    the    LorCont    f'         ' '"'^  ^'^^  ^"'■^■^^^^ 

M...  o.„. . .  ,„  r„/;r-„^rLr„:- :; 

,  ■^a*""''  Garelte,  March    •      - 

'Board  of  Trade  Journal.  March  .9.  .9.7.  p.  8... 


Hj.  ''''I 


',;ji|a 


133 


PRICES  AND   PRICE   CONTROL   DURING  THE   WAR 


order  were  terminated  on  March  31  to  run  to  April  30,  and 
also  to  allow  the  prices  chargeable  in  April,  191 7,  to  be  cal- 
culated with  reference  to  the  prices  prevailing  in  March, 
1914.'  The  inclusion  of  April  in  the  winter  months  of  1916- 
17  was  found  necessary  liecause  of  weather.  A  couple  of 
weeks  later  the  Food  Controller  gave  notice  that  unless  prices 
of  feeding  stuffs  were  substantially  reduced,  the  winter  con- 
tract prices  for  milk  in  1917-18  will  be  not  less  than  is.  8d. 
per  gallon.' 

On  September  7,  1917,  the  Milk  (Prices)  Order  was  issued, 
which  fixed  maximum  winter  prices  to  the  producer  as  follows: 
October,  is.  5d.  per  imperial  gallon;  November,  is.  7Jd.,  and 
December,  January,  F"ebruary,  March,  is.  9d.,  with  the  addi- 
tion in  each  case  of  the  actual  cost  of  railway  carriage  for 
delivery  to  the  railway  station  of  the  purchaser.  The  retail 
prices  were  limited  to  2s.  per  imperial  gallon  in  October,  191 7, 
and  to  2s.  4d.  per  imperial  gallon  thereafter  until  the  end  of 
March,  1918.  An  addition  of  id.  per  quart  was  permitted 
for  milk  delivered  in  bottles  to  the  consumers,  making  the 
retail  price  of  milk  7d.  per  quart  in  October  and  8d.  in  the 
five  following  months.' 

The  consumers  of  milk  were  informed  that  the  above  prices 
were  justified  because  of  increased  cost  of  production  and  dis- 
tribution and  that  unless  prices  based  on  increased  costs  are 
paid  the  continuity  of  supply  can  not  be  insured. 

The  prices  do  not  represent  any  reduction  on  the  maximum 
prices  of  the  preceding  order,  as  the  government  in  the  spring 
of  191 7  pledged  itself  not  only  not  to  reduce  the  price  of  milk 
but  to  allow  an  increase  in  order  to  secure  the  maintenance  of 
dairy  heids  at  full  strength.  The  local  food  control  commit- 
tees were  given  powers  to  take  measures  for  the  proper  dis- 
tribution of  milk.  To  safeguard  the  interests  of  the  poor 
2,200  tons,  equal  to  4,000,000  gallons,  of  whole  milk  were 
furnished  to  medical  officers  of  health  and  to  institutions. 

'  Board  of  Trade  Journal,  April  5,  1917,  p.  19. 
'  Ibid.,  April  19,  1917,  p.  1 13. 
'Ibid.,  Septi-nibLT  13,  1917,  p.  561. 


CHEAT   BRITAIN 


»*3 


Ppry  at  reduced  prices  l„  mfa„„  „„,,  ta^.^iy,  , 

tion  with  the  Agricultural  n  ^«"^^""^'-.  after  consulta- 

Ireland.     It  J^lolnl  ^^PJJ^'--^^  ^'^  ^-eat  Britain  and 
prices  as  follows:  ^  '^   ''^'"  ""'^^  «"^   ««''!  the 

Potatoes  in  not  less  than  6-ton  lots,  f.o  h 

"5  s.  (127-98)  per  ton  for  deliverv  from  >i.„,      i 
•^°  ».  («29.20;  per  ton  for  de  iveX  in  K  'T'"^'"''*'^  '^  '"  J"""ary  ,„; 
'30  8.  ($31.63)  „er  ton  c /  "'^'"'^'^.'".'••''"■"ary  an,l  Manh; 
^i-J    °3n>er  ton  for  the  remainder  of  the  season  » 

Ihe  price  of  potatoes  in   fune    loifi    « 
cmpared  with  87s.  6d    (^2    20)    n  f'  '■*''•  ^*^^''*^-'"'  •''' 

of  the  issuance  of  the  order  'h  •^""''  "''■^-  ^^'  '^'^  "''"^ 
prices   to   be  con  ract  or  ^''^''^'■"ni'-nt   intended  tlu- 

produce  of  the  ;  t  c  a  v'rr"'",  ""'"  ''''"'>•  --^'  f- 
marketable  cond^rt  ^iS^XT  "''""^'  '"  ^"•"^" 
the  lioard  of  Trade   under  wT     r  v  "^"'''  "^  *'^''*^  "'"''^r 

out  an  order  requt  nratturn ^f  tor"/'^"^'  '''''  '''"''''' 
Britain.'     Two  orders  (Z    f    "i."*"''^^  "^  potatoes  in  (ireat 

Ireland)  were  alio  1^,  ?T  ^^"'''"'  '^''  "'her  for 
Ruanlini  ^he  s  '  l^^T^'f  ^«'    ^^   ^^e   purpose   t>f   .afe- 

On  rWber      'iL  thel':;'';r  '"'  '''''  ^^^^^'^  """-^ 

that  arrangement 'ad  tcnlactut-""'^'"'^^""''^^ 
the  distribution  of  seed  potatoc       Th    P      m"  '  T'"'"'^  ^"•■ 
of  Trade  has  invited  the  wnr  t    ^'^^^ ''^'^'^'^^"t  of  the  Hoard 
quest  borough    u  ban   .nd         T"'"''""'"  ^'""'"ittees  to  re- 
quantity  of  seed Ita"o'es  .1""    7"""'^  *"  ''"^^•^^^'"  -'^^'t 

cash  wi^  orde:l'::stvsri::rt  a'Tr "  ^1' -  ^ 

took  place  in  the  House  of  r  ""  '''''"'^^*  ^^hich 

:  w.^g<^  ^-<o^Xr  ^^S;^-^:^-.  -«.  P.  40. 


1.  -^1 


134  PRKES   AND   PRICE   CONTROI,   I)t'RI\<i  THE   WAR 

proposes  also  to  fix  them  for  artificial  manures  and  fertilizers. 
In  his  reply,  Bonar  Law  said  that  the  prices  in  the  order  were 
maximum.'  Mr.  Lough  thought  that  a  great  deal  of  harm 
has  |j«M.'n  done  by  the  order;  many  farmers,  according  to  him, 
were  prevented  from  plant  ng  any  ijotatws;  ihis  was  sure  to 
lead  to  a  tremendous  diminution  of  the  crop.'  The  President 
of  the  Board  of  Agriculture  replied  that  it  was  the  go\ern- 
ment's  object  to  discourage  the  growth  of  |X)tatoes.  It  is  diffi- 
cult to  see  why  the  Board  of  Agriculture  should  have  desired 
to  curtail  the  |xitato  crop,  which  in  1916,  l)ecause  of  nilitary 
drain  on  farm  lalnir,  the  falling  off  in  the  acreage  planted,  in- 
creased cost  of  production  and  had  weather  when  the  crop 
was  ready  for  digging,  fell  from  7,476,458  tons  in  IQ14  and 
7.540,240  ton=  in  1915  to  5,468,881  tons.  That  this  was  surely 
not  the  aim  may  l>e  seen  from  the  announcement  of  the  Under- 
secretary of  the  Board  of  Agriculture  on  the  next  day  that  the 
price  was  to  be  taken  as  minimum.  In  corroboration  of  this 
announcement,  the  Food  Controller  stated  on  January  25, 
191 7,  that  the  prices  fixed  for  potatm-s  of  the  191 7  main  crop 
had  been  further  considered  and  that  in  view  of  a  possibility 
of  an  unfavorable  season  it  had  lieen  decided  that  the  prices 
named  for  potatoes  "shall  not  lie  regarded  as  contract  prices 
but  as  minimum  prices  guaranteed  by  the  government  for 
potatoes  of  the  first  quality."' 

Thus  the  pressure  of  public  and  agricultural  opinion  com- 
pelled the  government  to  revise  its  hastily  concei\ed  plans 
and  declare  that  it  did  not  intend  to  compel  the  farmer  to 

'  Parliamentary  Dehatfs,  House  of  Commons,  1917,  vol.  xc,  p.  26. 

'  Ibid.,  p.  61.    The  cost  of  growing  an  acre  of  potatoes  on  gooid  land  was  ( alcu- 
lated  at  that  time  to  be: 

Seed £15  per  acre 

Manure 10  per  acre 

Rent  rates 3  per  acre 

Labor  (plowing,  cultivation) 9  per  acre 

Liftiii ;  of  the  crop 3  per  acre 

£40  per  acre 

.According  to  this  calculation  the  grower  on  the  l)asis  of  two  years'  average  crop 

(five  tons  |)er  acre)  would  have  expended  £40  per  acre,  for  which  he  would  have 

received  £30.    W.  VV.  Berry:  "Food  Control  and  Hasty  Decisions,"  Contemporary 

Review,  February,  1917.  p   186, 

'  Board  of  Trade  Journal.  January  25,  191 7,  p.  264. 


(iRKAT    IIRITAIV 

t.r,m  .,,h  rcB.„l  ,„  ,h..  „„„ „„,,  ,"  6  „,  , 

This  was  f,     „wecl  on  Fel.ruary  i,   uur    l.v  ,h..  1^    . 
I916.  ^Fain  Crop  (F'ricts)  Order   lu.^uh';  \\         '«'<»'•-'*• 

For  delivery  in  February,  iqi; 

For  .lelivery  in  March  or  April,  I9t7 ^'*  '^  •"" 

For  delivery  in  May  or  June   1917  £9  a  ton 

h.  V  (he|  was  gomg  ,o  insure  a  suffid™,  y  of  ,«,,■«,«.,  ,,,  I , 
until  next  er„p  c„me»  int„  the  market'"  ' 

The  ,„,ler  „f  February  ,  was  „l,vi„usly  is,ue,l  in  „„t  .„ 

'n  a  worse  position  than  England  in  retrird   t     I         . 
became  more  and  more  uneasy.     The  crop  was  a  bad  on" 

I  Statutory  Rules  and  Orders.  1917,  .\o   ,0 
IM..  No.  89;  see  also  Monhly  Rn^^.  ^Uhc  r   <:   b 
June.  1917,  p.  9,3.  "'>  "™«'  "J  '««  f--  S.  Bureau  of  Ubor  Statislirs 

'  Berry,  op.  cit.,  p.  185. 


136 


PRICES  AVD   PRICE  fONTROL   DfRINr.  THE   WAR 


•toclcH  were  running  short  and  it  wan  argued  that  the  lowering 
of  price*  by  increasing  consumption  would  only  result  in 
more  trouble.  Wholesale  merchants  complained  that  the 
farmers  were  holding  their  potatoes  for  better  prices  later  on 
and  that,  although  the  growers'  price  was  £8  per  ton  (SlS.g^), 
as  much  as  i'3  or  £4  ($14.60  or  519.47)  was  chargc<l  for  carting 
anfl  other  incidental  expenses.' 

Wholesale  prices  were  not  restricted  by  the  ortlcr,  and 
wholesalers  were  thus  free  to  make  what  profit  they  could. 
Retailers,  therefore,  in   their  turn,  complained  that  while 
they  were  ordered  to  sell  at  a  maximum  price  i  |d.  fxr  pound 
which  amounted  to   £14  pvr  ton,  they  had  to  pay  whole- 
sale merchants  from  £14  to  £15.    The  retailers  maintained 
that  unless  they  could  buy  at  £10  los.,  thoy  would  refuse  to 
handle  jwtatoes.    In  his  reply  to  retailers,  the  F<xkI  Controller 
stated  that  he  did  not  think  any  action  on  his  part  would  be 
neces.sary;  the  margin  between  growers'  and  retail  prices  was 
ample  to  allow  a  reasonable  profit  lK)th  to  wholesalers  and  t<. 
retailers,  who  should  arrange  the  matter  among  themselves.' 
There  was  no  impro\  cment  in  the  situation,  and  the  matter  was 
brf)UKht  to  a  head  when  the  Lord  Major  of  Manchester  sent 
a  telegram  to  the  Prime  Minister,  representing  the  i)ossibility 
of  an  immediate  fwtato  famine  in  Manchester  and  the  sur- 
rounding district,  and  recjuesting  that  the  subject  be  brought 
before  the  War  Cabinet.     He  pro|X)sed  that  the  order  be  so 
amended  as  to  make  it  compulsory  on  growers  to  release 
stocks  on  demand.    In  reply  to  this  message  the  Prime  Min- 
ister announced  on  February  17  that  inasmuch  as  the  recent 
prolonged  frost  had  reduced  the  a\ailable  stocks  and  inter- 
rupted their  regular  distribution,  it  had  been  found  necessary 
to  readjust  as  fairly  as  ixjssible  the  interests  ttf  all  parties. 

'  Uonlhly  Review  „f  the  V.  S.  liureau  of  hibor  Statistics,  June.  1917,  p  qu 
Just  the  reversf  hai>|)cno<l  from  what  was  preclkted  bv  some  writers  "How '= 
asked  Air.  Berp'  'is  the  F.«<1  Controller  to  (k-<i,le  which  farmers  are  to  have  their 
h  '.irM?,.?  ".';':; .''■'"■'s/n  Septei,il«.r,  an,l  which  are  to  be  compelled  to  hold 
thiMr  !K)tatoes  untd  Mayor  June.  It  is  obviously  letter  business  to  receive  i's  ISs 
in  SeplemUT  than  to  wait  for  the  price  established  for  late  deliveries  "  Berry' 
op.  cit.,  p.  iH5  "'■'■/> 


Monthly  Reriev.'  of  the  V.  S.  Bureau  oj  Labor  Statistics.  J 


lune,  1917.  p.  93.V 


At  the  Mi 


fi«KAT   nklTAIN 


'a? 


ttey  .h„ul,l  have  ,1  „r  W„r. ,  In"?    f'""'""  '"''•''  '««<■'• 

«>o  .o..  un.il  March  ;.  an*  t,,;''^;'      r •*■"'"  "'"^  *"  •"  ""•  "■'-il<r  will  U 

tracts.^  ''"'"^  "••'■^'  ""'  ««•  aff.rt  .xis.inK  ,-on- 

March  ,,  ,h.  maxinu.r     /e'o    r^;'     ""'  '"  '■''''"•^-  ^f'- 
retail  .alos.'  '"'"^  "^•''  "^  ''"■^'"^■ss.  hy  moans  of 

•Many  anit-ndnirnts  were  issue,!   ;,. 
rcKtilation  of  seed  potato  pri  „  "hrhtT'"''"   ""'   *'"' 

riiarj-.  prices  were  hxe,|  for  the  s  W.  i  ''''  ''•""■'  "*  *'"^'''- 

'he  grower  at  ^d.  per  o  nd  If  N  •''  '""''  ''^"■'""'  "^''^  »han 
hundredweight  or  [ess  '  ,";;  e  of  .1"  ' 'T" """"  "'  '•"^"'^•'"f 
I>rices  were  those  charged  i.y  the uro w  -r  '"l  '■^""  '"'"""'^  '^' 
tafon.  and  C.  an.l  ,os.  p.  ton  if  h':  '"'"'  "'  "''"'■'•'^"- 
hundredweight,  l,ut  less  t h  .n  Th  n  f  T  T''  ""''' ""•^"h-'lf 
ton  if  the  sale  were  cTve/t^/h^T   ?''^'''^'''=  ^■' ^^ 


I 

E 


ii 
(i 


I  as 


PRirM   AND   PHK  K   (ONTROI.    IHRINI,    TIIK    WAR 


April,  an  well  an  raiM>fi  hy  £3  piT  ton  the  prirrn  charKcable  for 
wtti  |M»tat(M>».'  An  amendment,  (lut«*<i  April  .V)>  I9I7>  ex- 
teniled  until  June  i,  Uj«7.  theonlers*  regulatinK  the  priies  at 
which  Hee<l  |)<>tat<>eH  might  Ik'  wdil.' 

A  measure  «»f  far  reaching  fnns«'r|uenre  wan  that  K^'urantee- 
inK  to  the  grower  on  and  after  SeptemU-r  15,  IQ17,  a  priee  of 
1'6  |M>r  ton,  in  lots  of  not  less  than  4  tons,  for  all  sound 
marketable  |MitatfM>s  grown  in  1017.^ 

The  |)otato  tn»p  in  iyi7  was  8,fx).v<HN)  tons  or  .Vl.M,!!^ 
tons  larger  than  the  rrop  of  I«>i6.  In  a  debate  in  the  House  of 
Commons  during  the  latter  part  of  ( KioIht,  l«)I7,  the  govern- 
ment was  severely  eriticized  by  Mr.  Kunciman  and  others. 
The  guarantee  of  a  minimum  price  was  coupled  with  the 
prohibition  to  sell  |)otatoes  In-low  the  fixed  price  of  t'6  a  ton. 
It  was  stated  that  in  Ireland  |)otatoes  were  spoiling  in  large 
c|uantities,  l)ecause  there  was  n«)  market  for  them  at  the  high 
price  fi.xed.  While  the  authorities  were  advising  the  jM-ople 
to  use  jxjtatoes  instead  of  bread,  they  were  at  the  same  time 
fixing  the  price  of  |K)tat<K's  Ix-yonfl  the  reach  of  the  |KK)r.^ 
Thus,  with  su|)plies  more  than  ample,  cheap  <listribution  was 
ham|K'retl  by  official  control.  In  his  reply  to  critics,  Mr. 
Protherodid  not  deny  that  there  might  l)e  a  surplus  of  |M)ta- 
tots,  much  of  which,  if  prices  were  to  be  maintained  at  a  mini- 
mum of  l'6per  ton,  was  likely  to  become  bad.  But,  he  affirmed, 
the  g<ivernment  could  not  break  its  pledge  to  the  producer.' 

As  one  way  ouf  of  the  difficulty,  .Mr.  Prothero  pro|K)scd 
that  some  of  the  surplus  should  1h»  used  for  mi.xing  with 
Hour  for  making  bread  and  some  for  industrial  alcohol. 

A  general  license  was  issued  by  the  F«M)d  Controller  on 
Xovember  17,  1917,  permitting  growers  to  sell  their  own 
j)otatoes  Ix'low  the  minimum  prices  fixed  by  the  government.* 
The  government,  however,  undert<x)k  to  recoup  the  growers 

'  Board  of  Trade  Journal,  .April  5,  p.  18;  see  also  Statutory  Rules  ami  Orders, 
No.  178. 
'  //>«/..  p,  j.^o;  see  also  Statutory  Rules  and  Orders,  No.  402. 

*  Ibid.,  p.  2,?o. 

*  The  Eioniimisl,  0<-tolier  27,  1917,  p.  692. 
'  [hi'L.  .Novcnilter  3,  I917.  p.  726. 

*  Board  of  Trade  Jourrtal,  .November  12,  1917,  p.  403. 


Uny.At    HRITAIN 


tf) 


rail.  KrMWtr«stat».n:  for  S«„tlan,l  L'.  .,w  '  .        "" 

a  .ur.K.n  on  .ho  taxpay.-r  for  .h.  UnH  T  ,,'V  ;;;"' 
The  Kovernnu-nt.  in  justirt.ation  of  i,s  ,k,Iu y  .■„..; 
this  Kuarant«'t>  ..r  1  h;„k  ..  •   •  .     •""">•• '•""H-iI  that 

PHHlLinK  th  .  l^t  *  ",'"r  '"■"••  "^'^  '"^«"""«'"..l  in 

aclmittinKthatt'hs  I^i^L  '"'•  T  '^^ ''--'''-  ^^'-le 
fin,|s",hrr..al Irn    f  K  """""  ^""'''  '"  ''•  »h»-  £>««««,/./ 

never  U-  taken  excent  in  ,-..,.      r        '""''.  ^-'k  n  m  tion  should 
tn  ix(i|,t  in  tases  of  urgent  national  nm-ssity.' 

•»  rUMt.  IKT  (lll.lrror  " 


VVIi.iit,  |K'rc|u.,rter 
Burlev.  |XT  quarter 
Ouls,  iJfrciiiarter.  .  . 


7Ns. 
S.St. 


the  order  ^Sr^:r^:;,r !        '^  ^'^  ''"'  '""^  "^  ^'^^  '--'  "^ 

Wheat,  (XT  quarter 

Barley,  prr  (juarter NSt.     2,1. 

Oats,  per  rjuarter    71s.  loil. 

57S-     id. 

The  fixed  prices  were  suiKTst-ded  on  August  u    loi-    I 
ttie  following:*  ""8u»i  14,  1917,  hy 

">id.,  August  J.?,  19,7,  ,,.  ,y,  ^''^'  P   "* 


I  i 


130  PRICES  AND   PRICE   CONTROL  DURING  THE   WAR 

Wheat  and  Rye  Oats  Barley 

For  Delivery               per  Quarter  of  per  Quarter  of  r»r  Quarter  of 

504  Pounds  336  PouP'*"  448  Poui-.ds 

^-     d-  s.  8.     d. 

Before  1st  December,  1917            73    6  ' »    j  62    9 
In  December,  1917,  or  Jan- 

uary.  1918.                                   74    6  45    3  6a    9 
Injanuary,  i9i8,orMarch 

I   'P'*i     •»•/ 0--  75    6  46    3  6j    9 

In  AprilorMay,  1918.  .  .  .  76    9  47    3  6a    9 

Onoraftcr  1st  June,  1918.  77    9  48    6  62    9 

The  order  contains  certain  provisions  permitting  additions 
to  these  prices;  thus  where  oats  are  bought  by  a  miller  specific- 
ally for  the  manufacture  of  oatmeal,  rolled  oats  or  flaked 
oats,  3s.  per  quarter  may  be  added  to  the  maximum  price. 
In  the  case  of  damaged  wheat,  rye,  barley  or  improperly 
cleaned  oats,  certain  deductions  are  allowed. 

A  number  of  flour  and  bread  orders  were  issued  before  the 
establishment  of  a  standard  price  for  bread  and  flour  in  191 7. 

The  orders  fixed  the  percentages  of  flour  that  could  be  ex- 
tracted from  wheat  of  various  origins  and  qualities,  prohibited 
the  use  of  wheat  in  the  manufac  .re  of  beer  and  dealt  with 
the  various  conditions  on  which  bread  might  be  manufactured 
and  sold.'  On  April  30,  191 7,  the  Food  Controller  took  over 
all  flour  mills  in  the  United  Kingdom  which  used  any  wheat 
in  the  making  of  flour,  except  mills  the  output  capacity  of 
which  was  less  than  5  sacks  of  flour  per  horr.  The  effect  of 
this  order  was  that  the  mills  passed  into  the  possession  of  the 
Food  Controller,  the  work  in  them  to  be  carried  on  in  accord- 
ance with  his  directions. 

The  Flour  and  Bread  Order,  191 7,  dated  September  17, 
established  the  following  maximum  retail  prices  for  bread 
and  flour: 

Bread 

Per  4  pound  loaf oj 

Per  2  pound  loaf i\A. 

Per  I  pound  loaf aid. 

Flour 

Sack  of  280  pounds,  or  half  sack j^jr  sack  50s. 

7  pounds  or  more,  but  under  half  sack,  per  14  pounds 2s.  8d. 

Per  quarters  (3 J  pounds) g jj 

Per  half  quarters .  .'      4  Jd 

Per  I  imund 2id 

Self-raising  flour  per  pound ^  Jd! 

'  Gnat  Britain  Statutory  Rules  and  Orders,  191 7,  Xo.  377,  or  Board  of  Trade 
Journal,  A|)ril  26,  191 7.  ' 


GREAT  BRITAIN 


»3l 


pounds  at  the  mill  dlr  l^n^  f  i^^''  ^'^-  ^''  ''^^'^  °^  ^80 
higher  price  ac"  rdf„rto  quaC  T^e  n""  '1  '"  "''  ^^  ^ 
been  fixed  with  a  view  of  alS.  Th  ^"'m  "^  '*^'-  ^'^-  ^^' 
and  not  more  than  a  rrlfh,:  ;!,h^M  ""'"  ^  ^^'^^^"'^'"^ 

of  loXT'nlt  th2  ^'^  ^''- ■^T'"^"^  ■"-"  ^  ^^"-ion 
cost  to  the  Schenueronhur •"■?''?'  ■''''''''■  '^'''^>--'y 
••s  about  £40.oooZ  Vhe-^^,j;:;r':^^^^^^^^^  '"r"'  '^'^^^ 
-ent  by  means  of  which    he^o  "  nZt"       '' ^  '"^"^^- 

taxpayers  pocket  with  one  hand  and  J^thh''^^^^^^  '"'°  ""' 
h.m  with  a  4  pound  loaf  for  od   "    On  ,1       ?"T"^""*^ 

£co«o^,-./.  v,,hile  admitting   hat  fh.    ?  •        ^?"'  ''^"^'  ^''^ 
serious  objections.  sup,^"r?s  Lo  J  Rh    "n '"^  1"''  "  "P^"  *« 
"it  is  the  best  expedien^^i  th         ^''""^  '^^  '"  his  claim  that 
The  Oar^l^Af  •      J    *''''  P''^"*'"*  '  ircumstances  "' 

ucts,  and  of  5^    ner  noi.nH   f  .       *^^''  ''''*'  P''"^- 

flaked  oats.^     Th  s  orde^  u  ''^"?"^''  '""""^  «^^-  ^"^ 

Maize  Products    LtanPH^e^rC'^t  '"  ^'^^  ^^^^  ^^ 

May  .3. 19x7  (N^.  48:;:  ^l^^^j:;,:^^;  '^-^ 

from  June  18.  for  maize  flour  maize  fl.L.  "l^'"'""'"  Pnces. 
3ld.  per  pound  and  for  oa°m;arrolH  '  aT^'  '*"•  *« 
4icJ.  per  pound  in  Scotland  Id  Jh  T'  ^-^^'"^  '^^^^  ^" 
Kingdom.'  ^"^^  ^'sewhere  m  the  United 

Meat 

JM.,  see  also  Labour  Ga^tte',  UnVmy^'l ,^,_ 


w 


I3a 


PRICES  AND   PRICE   CONTROL   DURING  THE   WAR 


a  similar  law  was  passed  in  New  South  Wales.  In  February, 
1915,  the  Australian  and  New  Zealand  Governments  agreed 
to  buy  on  behalf  of  the  British  Government  all  the  beef, 
mutton  and  lamb  available  for  export.  F.  o.  b.  prices  were 
amicably  arranged  in  all  states  and  the  whole  exportable  sup- 
ply was  shipped.'  The  great  difficulty  as  to  the  imported  meat 
supply  throughout  the  war  had  been  the  shortage  of  shipping, 
to  overcome  which  systematic  shipping  arrangements  were 
made  by  the  British  Government.  The  method  adopted  by 
the  government  for  distributing  Australian  meat  among  the 
civilian  population  was  to  resell  it  to  firms  who  "formerly 
received  the  Australian  supplies."  These  were  selling  the 
meat  on  commission  and  were  bound  to  sell  it  "in  the  usual 
manner,"  so  that  "as  far  as  possible  it  should  pass  through 
the  usual  channels  and  in  the  usual  quantities."  In  case  of 
supplies  running  short  the  available  amount  was  "pro  rata." 
"The  distributors  were  held  bound  to  sell  only  to  bona  fide 
retailers  in  the  old  proportion."  This  scheme  was  similar 
in  its  essential  characteristics  to  that  adopted  for  the  dis- 
tribution of  sugar  and  was  open  to  the  same  objections. 
For  two  years  unusual  conditions  had  been  confronting  the 
country,  a  redistribution  of  population  took  place  and  yet 
the  government  imposed  on  dealers  the  sale  of  meat  in  the 
"old  proportions."  *  In  no  case  were  the  wholesale  dis- 
tributors allowed  to  add  more  than  ^d.  per  pound  to  the  price 
which  they  paid  to  the  selling  agents.  No  price  was  fixed 
for  retailers.  The  Board  of  Trade  Committee  on  Prices 
thought  that  the  wholesale  selling  policy  probably  was  suffi- 
cient to  secure  a  general  check  on  inflation,  the  instructions 
to  the  agents  being  that  they  should  aim  at  steady  and  moder- 
ate prices.' 

Part  II  of  the  Meat  (Sales)  Order,  191 7,  which  came  into 
force  on  June  4,  1917,  was  directed  towards  securing  the 
elimination  of  jobbing  transactions  in  the  sales  of  dead  meat 
and   towards  limiting  the  salesmen's  profits.     A  salesman 

'  Report  (interim)  of  the  committee  on  prices.    Cd.  pp.  9-10. 
•  E.  Cannan,  in  the  Economic  Journal,  December,  1916. 
'  Interim  Report  on  Prices,  p.  II. 


GREAT    BRITAIN  j.. 

selling  a  carcass,  side  or  quarter  could  only  charge  ,d  a  stone 

cu^' imo  '  'T  '■  "'".'  '^  '^"^''^  ^'^-  ^d^'^--'  ''-rears 
cut  into  smaller  joints).' 

20^1!!!!. ^^''r  ^^*"''™"'"  P"^^«)  Order.  1917.  dated  August 
29.»  schedules  for  maximum  dead  meat  prices  as  from  Septem- 
ber 3  were  fixed.  The  beef  prices  corresponded  to.  and  were 
based  upon  the  maximum  prices  for  live  hundredweight  for 
cattle  purchased  by  the  army:  ^ 

SCHEDULE  OF  M.AXIMUM  WHOLES.ALE  MEAT  PRICES' 
P^l""''  T^^'        -^1"'.'°"  »"<•  Lamb  Pork 

n^^^P^  "-""""^  H^re-^-- 

September si  %'{  ^- ^„-  «•  d-  «•  d.  s.  d. 

OctoJ^r 8*  I*  «8  7H  96  86 

Novt-mber 8^  78  2«  ^8  96  86 

Deceml^r 80  78  «^  ^S  '6  86 

1918  ^*  **°  78  96  86 

^''""-^ '■»  7°  «o  78  96  .8 

The  retail  butcher  could  not  sell  meat  over  the  counter  at 
prices  which  in  the  aggregate  exceeded  the  price  paid  by  him 
by  more  than  .  d^per  pound,  or  20  per  cent,  wWchever  wa" 
the  less.  Out  of  this  diflference  the  retailer  hac  .  .  pay  all  hi 
expenses  of  business.  Furthermore,  the  local  food  control  com! 
mittee  was  empowered  to  fix  schedules  of  maximum  retail 
prices  for  the  various  joints.  These  schedules  varied  from 
district  to  district,  according  to  local  conditions  ' 

An  official  statement  issued  on  July  20,  19,7.  announced 

DeDa"tmenr'"f*  ""f  '!"'  f  ™^  ^"""'^^  ^"^  *^^  Agricultural 
RhnnHH  T  ,  ^  .Z?^'^"'^'  ^""''^"^  ^"^  Ireland,  Lord 
Rhondda  had  deeded  that  the  following  should  be  the  maxi- 
mum prices  for  live  cattle  for  the  Army:  September,  74s.  per 
live  hundredweight.  October.  72s.,  Noven  ber  and  D;cember 
67s  January  6os.^  As  shown  above,  maximum  prices  were 
fixed  on  a  corresponding  basis  for  civilian  population  and  steps 

oUl^!U1A^i"''  ■'""'  ''  '9'7.  pp.  53.-533.  or  r.atutory  Rules  and 
\Board  0}  Trade  Journal.  September  6,  i<^n   p   ,os 


'  Frt  if 


134 


PRICES   AND   PRICE  CONTROL  DURING  THE   WAR 


S  I 


were  taken  to  control  the  profits  of  butchers  and  others  in 
such  a  manner  as  to  ensure  that  the  benefit  of  the  reduced 
prices  would  accrue  to  the  consumer.  The  fixing  of  maximum 
dead  weight  prices  for  cattle  limited  the  profits  of  the  farmer 
and  of  the  cattle  buyer,  and  the  fall  in  wholesale  price  at  the 
end  of  1917  compared  with  July  of  the  same  year  was  19 
per  cent  in  the  case  of  mutton  and  17  per  cent  in  the  case  of 
beef.' 

Fearing  that  the  new  scale  of  fixed  prices  might  lead  to  a 
reduction  in  the  supply,  the  Food  Controller  reduced  the  cost 
of  feeding  stuffs  to  the  farmer,  and  by  an  order  of  Novemljer 
I  substantial  reductions  were  effected  in  linseed  and  other 
kinds  of  cake,  milling  offals  and  various  cattle  foods.'  This, 
however,  helped  matters  very  little. 

An  anomalous  situation  with  regard  to  meat  arose  at  the 
end  of  191 7  owing  to  high  prices  of  IWc  stock  as  compared 
with  fixed  maximum  prices  for  meat.  The  Food  Controller 
issued  an  interim  order,  limiting  the  prices  which  could  be 
paid  for  live  stock.' 

The  effect  of  price  fixing  in  the  case  of  meat  is  not  easy  to 
follow.  While  one  can  readily  ascertain  and,  if  necessary, 
limit  the  number  of  cattle,  sheep  and  pigs  slaughtered,  the 
more  important  thing  to  know  is  the  rate  of  breeding  to 
replace  the  numbers  slaughtered.  If  farmers  reduce  the  num- 
ber of  calves  bred,  it  takes  time  before  the  fact  becomes  ap- 
parent, and  any  legislation  which  leads  to  such  results  is  harm- 
ful from  the  standpoint  of  future  supplies.  Mr.  Prothero  has 
been  all  along  opposed  to  the  reduction  of  the  price  of  meat 
from  67s.  to  60s.  on  January  i.  1918.  In  his  words,  "it  put  a 
premium  on  grass  as  the  cheapest  form  of  cattle  feeding;  it 
penalized  stall  feeding  on  arable  farms,  and  so  tended  to 
diminish  the  supply  of  manure,  without  which  it  was  impos- 
sible to  carry  on  arable  farming  with  success."^  A  new  order 
left  the  price  of  cattle  at  67s.  per  live  hundredweight  during 

'  The  Sldtisl,  December  i,  1917,  p.  1120. 

'  Ibid.,  p.  1 120. 

»  Board  of  Trade  Journal,  December  27,  1917,  pp.  664-65. 

*  The  Economist,  October  20,  1917,  p.  564. 


GREAT   BRITAIN 


'35 


'X'roltlyT'''  "^  ''''•  ''^  ^«'"«-  -  ^-  to  take 

Order,  which  forbade  the  ^::^ZTS.r  f  "^'l"^ 
January  i.  ,9,8,  and  of  male  caKe    Ifu-r  l?     u  ''^''' 

The  order  also  prohibited  the  sat  of  Ian",  T  'f'  'V^' 
P<nted  Iamb)  between  February  1018  1'  r'  ''"  ""■ 
and  the  slaughter  of  in-oi^s  sow,  in?  .  •^""''  '^'  '9'8. 
or  in  calf  heiLs  as  frr'SZb;;'^^:  ^r'  '-'''  -- 

The  Meat  (Retailers'  Restriction)  6rc?er,Q,8    i        h 
January  17,  ,9x8,  provided  that  a  retail    utch?r       Z    "^  ^" 
any  week  purchase  a  greater  number  nfpn.H  "^  "''' '" 

meat  than  the  number  or  quan^tvnrl.'T  "•"""'' ^^  "' 
Controller.    The  next  st^o  «"!   /  -^P'^'"'.^"^  ''>"  ^^e  Food 
to  which  it  obviously  hX::m::     "'°"'"^  ""'  ^^"^"'"-' 
Bacon,  Ham  and  Lard 

prices.     In  I'necdo^thT'r-  ''^"'"^^^^'  ^"^  '-P-'-s' 
importers-  Pr^ t^mt  ;t tmS ^^^^^^  ""r*^-;^^ 
ruling  in  foreign  countries,  over  Stt  Fo^H  r    ^^^^^^ 
no  control,  and  that  th^v  m..  Ik         •  "^  Controller  has 

-  win  ensure'h?.l^lVT;'„^„nrSr  ^'l^  %'T 
quate  suonUpe  i    n„«  ^  f-  'cm  to  ureal  Britam  of  ade- 

?heimZ'atL.ex?e  ttd^rrnro^b^^  ''''  -'-' 

was  prohibited.    The  object  of  Tht!^^'^^ 

government  to  take  over  the  1  I     •     ^^  '''^'  '°  ""^'''^  t'^^ 

and  to  concentrate  the  pu  chase  ortr^"-'  "'  -'^^  ^^*'^'^^' 
in  a  single  organizat  on  ^"55     "^"f  '^"^"^ '"  various  countries 

was  theUrhmrtin  theTl^^s^efor  "^  ^^^^^ 
agency,  analogous  to  the  VVheat IxporTcomnr     J""'"^ 

jiaA<,«rGasf«e,  September,  1917   „   ,,8 
Boar,/  „/  Trade  Journal.  S^p.LU  e','?^,;,  p.  505. 


vf 


136 


PRICES  AND   PRICE  CONTROL   DURING  THE  WAR 


Butler 
The  Butter  (Maximum  Prices)  Order  dated  August  31, 
1917,  established  from  September  3,  1917,  maximum  whole- 
sale prices  for  butters  of  various  kinds,  and  also  provided 
that  after  September  10  no  person  should  retail  butter  at 
more  than  2jd.  per  pound  in  excess  of  the  actual  cost  to  him ; 
an  additional  Jd.  per  pound  was  allowed  for  credit  or  for 
delivery.      Food   control    committees   were   empowered    to 
prescribe  from  time  to  time  a  scale  of  maximum  prices,  in 
accordance  with  the  general  directions  of  the  Food  Controller.' 
This  order  applied  to  home  made  butter,  leaving  imported 
butter  out  of  control.    The  plan  was  found  unworkable.    On 
September  20,  first  hand  maximum  prices  of  butter  have 
been  fixed  for  or  on  behalf  of  the  importer  or  maker  of  French 
butter  at  238s.  per  hundredweight  for  French  Paris  (unsalted).' 
At  about  the  same  time  the  Food  Controller  announced  that  he 
had  appointed  an  advisory  committee  to  consider  the  control 
of  purchase  and  distribution  of  butter  supplies  and  that  the 
committee  was  engaged  in  working  out  the  details  of  a  scheme 
for  the  complete  control  of  the  imports  of  butter. 

Danish  butter  was  scUing  at  that  time  at  a  much  high.  - 
price  than  the  domestic  product.  Two  orders  were  issued  -t 
the  beginning  of  November,  191 7,  one  making  certain  altera- 
tions in  the  previous  Butter  Order  and  the  other  fixing  the 
first  hand  price  of  both  Danish  and  Dutch  butter  (at  229s. 
per  hundredweight)  as  well  as  the  price  of  blended  butter 
from  English  factories.'  The  purpose  of  these  orders  was  to 
bring  imported  and  home  produced  butter  to  approximately 
the  same  level  of  prices.  The  importation  of  Dutch  butter 
ceased.  Lord  Strachie  in  a  letter  to  the  Times  of  January  9, 
1918,  pointed  out  that  Lord  Rhondda  has  fixed  the  price  at 
which  butter  imported  from  Holland  may  be  sold  in  the 
United  Kingdom  at  229s.  per  hundredweight,  while  the  cost 
of  producing  such   butter  is  445s.     "It  is  unnecessary," 

•  Labour  Gazette,  September,  1917,  p.  318. 

'  Board  of  Trade  Journal,  September  27,  191 7,  p.  676. 

'Ibid.,  November  8,  1917,  p.  295. 


GREAT   BRITAIN 


»37 


*37 

Australian.   „«..    Ne?latad    ,,."/■"■■  "  '""""'^ 
British  made,  j.,4.    Th,  ,„      '   "-^^   AilK-mina,   lie. 

tually  m<»,  ij^o,  b„,  ef^^^  ''T'"  ""'  '«"- 

3--  .o  -  .d.  ^  p„„„,,  :i[C"Lt^ro  •:;;tX:'; 

Cheese 

to  resell  at  is  4d    per  117^^^^ 

British  made  cheese  wLTedh  ''^'''^'"  ^"^^  ^^  ^^e 

1917.  This  order  aLreruti:.'"  "^'''  ^"*"'  ^"«"«t  3i. 
others  than  malcers^  The  oJh  ^"f''  ^'^  ^  '^^'^^  by 
when  the  Fcx^  Control W  ''■^'  '"''  *''^"  ^  '"«"th  old, 

forthcoming^vanee  b  hern^l^L'  ''•'*  '"  "^^^  «^  ^he 
order  to  en^coura^e  ^ ^alin^  7  ^Je^^  1'""''  ^"'  '" 
plus  supply  of  milk  may  be  ava  lablT  thT  ^'  """^  '""■• 
hand  price  of  all  whnl^  m.'iL.    7^"^^^^'  *"£  maximum  f^rst 

per  hundredlthT'  Theannor^"""''  "^  '^'^  *«  ^37s. 
exceptions  to  tWs  price  and  th""'!! '""'"^'■^*«^  ^^^t^'" 
November  i    ,0  7   ti?        •     ^"  '*^*^  ^''^^  «"  ^nd  after 

milkch^e.  w  th  heaLr"""'"-  '"'  ''^"^  ""^^  "^  -^oL 
14.S.  per  hundrellwelgh^"'     "''""^'  "°"'^  ^^  ^^  '-^  than 

appiL^hrpits^i^:^^^^^^^^^^  ^;-  Tk '''  '-^'  ^--"er 

cheese.  It  fiL  thTmaxLu^  fi"?l  ^^^^^^rder  to  Dutch 
an  importer,  on  fu  I  c^eTrheddarThan "" '^'"^^^''^  ''^ 
proportionate  decline  on  poorer  grades'"^^  ''  ^"'^-  "'^'^  ^ 

I  rfe5/.«/ator,  January  12,  ,9,8   „   ,, 
aa-^r  „/  C<,«^^;.  II- Z:  %ttVy.  ,9,8.  p.  „. 


if-i 


Ki 


138  PRICES  AND   PRICE  CONTROL  DURING  THE  WAR 

Tea 

On  March  16,  191 7,  the  Food  Controller  announced  that 
an  arrangement  had  l)ct'n  made  with  the  various  tea  associa- 
tions, representing  importers,  brokers  and  distributors,  that 
on  and  after  May  i  tea  shall  lie  sold  retail  at  2s.  2d.  and  2s.  4cl. 
(52.7  and  56.8  cents)  per  pound  and  upward.  To  insure  a 
reasonable  supply  at  the  lower  price,  40  |ier  tent  of  the  im- 
ports from  India  and  Ceylon  were  to  be  allocated  to  the  trade 
by  the  importers  for  this  purpose.'  The  popular  retail  price 
of  tea  up  to  November,  1916,  advanced  8d.  per  pound,  of 
which  7d.  per  pound  was  increase  in  duty  and  only  id.  per 
pound  was  an  advance  due  to  other  causes.  In  November, 
1916,  the  price  was  2s.  as  compared  with  is.  4d.  in  1914.  A 
number  of  reasons  brought  alxjut  a  rapid  rise  in  price  in  the 
early  part  of  191 7.  Some  of  these  reasons  were  (i)  market 
rumors  that  the  Food  Controller  was  going  to  take  action 
with  regard  to  tea,  (2)  exceptionally  large  demand  on  the  part 
of  consumers  who  anticipated  shortage,  (3)  curtailment  of 
supplies,  first  by  the  prohibition  of  the  importation  of  tea  from 
China  and  Java,  and,  second,  by  restriction  of  space  allotted 
to  tea  shipments  from  Calcutta  and  Colombo.' 

In  July  the  scheme  of  distribution  was  so  amended  that  by 
arrangement  with  the  trade  30  per  cent  of  the  total  imports 
of  tea  from  India  and  Ceylon  was  allocated  to  be  sold  retail 
at  2s.  4d.,  per  pound,  35  per  cent  at  3s.  8d.,  and  25  per  cent  at 
3s.  per  pound,  the  balance  of  10  per  cent  to  consist  of  fine  teas 
at  above  3s.  per  pound.' 

At  the  time,  the  position  of  the  tea  supply  attracted  some 
attention  in  the  press,  and  various  statements,  some  of  an 
alarming  nature,  appeared.  In  view  of  this  the  Food  Con- 
troller reassured  the  public.  According  to  him,  though  the 
importation  of  China  and  Java  teas  had  been  stopped,  this 
has  been  more  than  balanced  by  the  prohibition  of  exports 
except  under  license.     The  difficulty  in  providing  tonnage 

•  Monthly  Review  of  the  U.  S.  Bureau  of  Labor  Statistics,  June,  1917,  p.  940. 

•  The  Economist,  Februar>-  16,  1918,  p.  368. 

•  Monthly  Review  of  the  U.  S.  Bureau  of  Labor  Statistics,  November,  1917,  p.  98. 


G«EAT   BRITAIN 


>39 


JjTt^^ioTtUtrnZr  ''T.r;  ^-^^^  '"--'•    Economy 
There  s^ms  to  iL     I         "^  ^"  ^'•"^'''tuffs.  has  fx^n  u,^ed  ^ 

Society  placed  upon  the  Tea  Advi«^rv  r'^''''''  ^^'''"'^''^ 
attacked  the  compositLn  nf  ♦k-      ^       '"'"'""••"  " '"^ 
that  under  sta"  pZhl"  and  d'^r'"'"'^  ^"''  ''"««'^«ted 
appointed  with  c^l^^X  p^^t"'"'""  ^  '^^  ^"■^«^»-  «- 

pr^tco.n,n      r^^^^^^^^^ 

••nJdltWbur  ^hrn^r  "^  ^^  '-  -  '--•^'^  ^ht".''  exist, 
profil.  ''^  "^""  *''^  ''"^"■^  ^h-  -PP'i-  or  tea  at  a  minimum 

higher  and  higher  in  rnvf^n  I  ^'^  *''■  '^'^  P"""^'  -^''ed 
public,  the  control!^  teLiheil  "T"'  """''"^  *°  ^^e 
'on  which  had  to  bellr:;,tr!^Ie':t  m"'  "  '"'"  ^"^  ^^y- 
to  have  practically  disa^^ear  J  alTthat'lheT  '""■ '  "^""^ 
able  to  buy  were  the  chnJrr;  housewives  were 

By  an  order  dLldOctn^  *^^'  ^*  '''''^'■^S^r^t  prices.' 

shotdd  be  soid^ttlfoctot^;;' 'ir  ''""'''^  ^'^^^  -  *- 

per  pound  «    Further  rT^  ^  '  ^^'  ^*  ^  P"^^  exceeding  45. 

oTtefon  Decemir  I'^Tt  7'  "T."^'^  ^^  *"  ^'^^  p'-- 
order  may  be  sum^li  JL^;ll«^^^-"<^  of  t^^ 

per  pound:  dass  C,  3s  t'^TTn     '  ''"2  ^;  ^^^  '^^  *«  ^«- 
pound;  uncontrolleiiX. ^r^ota       ''""'^  ''^"  ^'  ^^^  ^^ 

to  b::^aastr  ."^'Tt?'  ^'rr-'"-  p""-  --  fi-d 

pound;  class  C,  3  '  to  3r4dr^     '^^  ^;  "^^  ''•  ^«  ^^^  P- 
pound,  and  unc^'ntr^^-.t's^pe^^t j'^^  ^'  ^^-  ^^^  - 


140 


PmiCIt  AND  raiCI  CONTROL  DURING  THE   rVAK 


I     i 


I 


%  > 


Beans,  Peas  and  Pulse 

By  the  Beans,  Peas  and  Pulse  (Requisition)  Order,  191 7, 
dated  May  16,  1917  (No.  457),  the  Food  Controllertook  over 
from  the  original  consignees  all  beans,  peas  and  pulse  suitable 
for  human  food  which  had  arrived  or  was  to  arrive  in  the  United 
Kingdom.'  The  order  was  supplemented  by  a  Retail  Prices 
Order  on  May  29.  191 7  (Order  No.  571),  which  fixed  three 
schedules  of  maximum  retail  prices  for  various  kinds  of  beans: 
one  schedule,  the  highest,  to  apply  until  June  30,  1917,  one, 
during  July,  1917,  and  one,  on  and  after  August,  1917.  The 
prices  for  the  third  period  were  fixed  as  follows:  large  butter 
beans,  8d.  per  pound;  white  haricot  beans,  8d. ;  colored  haricot 
beans,  5id.;  large  manufactured  lentils,  8d.;  small  manufac- 
tured lentils,  7d.;  blue  and  green  peas,  9d.;  yellow  split  peas. 
6d.*  The  sale  of  peas  in  packages  was  authorized  under 
certain  conditions. 

A  couple  of  weeks  before  the  issue  of  the  first  of  these  two 
orders  the  Food  Controller  took  over  by  a  special  order  all 
"Burmah"  peas  and  beans  arriving  in  Great  Britain.*  The 
price  to  be  paid  was  fixed  at  £37  per  ton  for  handpicked  white 
beans,  prices  for  other  varieties  being  at  corresponding  levels. 
Before  this  order  market  prices  ranged  around  £80  per  ton. 
The  commandeered  beans  were  to  be  sold  at  a  retail  price  of 
6d.  per  pound,  which  was  about  half  the  price  existing  before 
the  For  Controller's  intervention.  The  classification  "Bur- 
mah" ers  various  types  of  beans  imported  from  Egypt, 
Spain  apan  and  China,  including  the  Soya  bean.  At  the 
begin,  .ng  of  July,  the  Food  Controller  authorized,  until 
August  15,  sales  and  purchases  of  beans,  peas  and  pulse 
contracted  before  May  30  at  prices  exceeding  those  permitted 
by  the  Order  of  May  29.* 


'  Defense  of  the  Realm  Manual,  May  31,  19 17, 

•  Ibid.,  p.  262;  or  Board  of  Trade  Journal,  Ma 

•  The  Economist,  May  5,  1917,  p.  774. 

•  Board  of  Trade  Journal,  July  12,  1917,  p.  8a 


p.  361. 
ay  3«.  1917.  p.  472. 


OMAT  BRITAIN 


»4« 


Miscellaneous 
The  maximum  ^^^  p^irpt^;r„7rL?t,"' '""  r  *'"^^ 

A.a'::^r;::;''pr;j^t'''r  r  -^  ^r  .^■"'"  'j- 

facturm'  Price,)  ()„|„  S    °    ■  ""  '<'',»l''""-i'»  '■'*'a"u. 
gages  and  raspberrie.  •  "  *^"  "  P'"""'  <li"m»n,,  green 

IS.  6d.  PC.  pound  and  that  o  I:  X  ^  iT  ^^r^H  '"^^ t' 
had  coflFee  on  offer  at  those  rates  he  r^.M  im  "  "*  '^^'''^'' 
of  roasted  or  ground  coff^at  l„v  '^       '""■  ^'"^'''''^ 

per  pound.  an5  of  raw  co^  atlnv  nr!"  ""'  "'^'"''"^  ^"  ^• 
An  order  issued  towardX  enj  .m  "  r""''"^  '"  ■»^' 
the  retail  price  of  AoJ„,;J„,2«t  T'"'"''*  '^'"'  "'""«' 
hibited  retail  sales  to  on^cu  Ze"  <? ''•  '^'' '"""^  ^"^  P^ 
one  week.    It  also  fixed  Xe^"^  a^d^  XLrpJier."'^  '" 

9d.  if  sold  without  the  skin^d    ci  7;'*"  "^^  ''^'"'  '«• 

rabbit.'  ^"e  Skin,  and  lod.  a  pound  for  any  part  of  a 

The  Food  Controller  fixed  also  n,axin,um  prices  on  fish. 

jg^H^^l^.^.^--^^^         —  M-.  ...  P.  .03. 


m 


r*t<^ 


CHAPTEK  VIII 

Oovvminontal  Control  sad  Price  Filing 

Coal 
From  the  ear'ir^t  sugis  of  the  war  questions  concorning  the 
prices  of  cm],  the  profitn  o(  coal  operators  and  the  wages  oi 
minersreceivwlagreai  leal  of  attention.     Because  of  tht- sharp 
rise  in  pricM  and  the  shortage  of  8upf>ly,  the  Board  of  Trade 
appointed  a  committee  to  investigaiL  the  conditions  in  the 
retail  coal  trade.     This  committee  reported  the  results  of  its 
investigation  in  April.  1915.     It  studied  mainly  the  conditions 
in  London,  and  found  that  the  actual  increase  in  prices  for 
best  coal  between  June  16,  1914,  and  February  17.  1915, 
amounted  to  9s.  per  ton,  the  price  having  risen  from  26s.  to 
358.;  the  cheaper  kinds  rose  more  rapidly,       invi  nuts"  hav- 
ing increased  in  price  from  20s.  to  34s.     The  chief   ause  of  the 
increase  was  a  reduction  of  supply  due  to  the  fai     that  some 
130,000  miners  had  joined  the  colors.'   Four  other  causes  helped 
to  intensify  the  scarcity  of  coal  in  London:  (i)  decrease  in 
sea  borne  supplies;  (2)  congestion  on  the  railways  and  shortage 
of  wagons  arising  especially  from  military  requirements;  (3) 
lack  of  storage  accommodation  in  Lon.lon,  except  among 
wealthy  people;  (4)  excessive  demand  at  certain  periods  due 
to  "panic"  orders.     The  committee  found  that  the  cost  of 
production  at  the  mine  f  ad  increased  oidy  slightly,  by  les.s 
than  IS.  (24.3  cents).     The  wages  of  miners  and  railway  rates 
had  not  changed,  and  the  increasefl  cost  of  wagon  hire,  horses, 
fodder,  etc.,  as  well  as  increased  wages  of  carters  and  loaders 
were  found  to  amount  to  no  more  than  2s.  per  ton.     The  total 
rise  in  the  cost  of  production  and  distribution  was  therefore 
at  most  3s.  per  ton,  while  the  price  to  the  consumer  in  London 

'  Report  (interim)  of  departmental  committee  to  inquire  into  the  causes  of  the 
present  rise  m  the  retail  prices  of  coal  wid  for  domestic  use  (Cd.  TBfUil.  London 
1915;  see  also  The  Economist,  .April  lo,  1915,  p.  705. 

"42 


G»RAT   BRITAIN 


143 


I'mm'r.onr  "°™"'  "■'"'"  '»"•  ••>  ""  -—  varying 
tunities  for  "conference"  «„  /"^ ,'''/"»» there  were ..ppor- 

making  due  aIlowanTf<rrnc-at^; ::;•'' ^      T''-'"'  '''"' 
distribution.  increased  cost  of  pnxluction  and 

The  committee  recomniendtHi  (1)  restW, nV.n  „t 
neutral  countries.  (2)  accumulation    fl  "       *""''''""  *° 

don,  (3)  reducion  of  freigh,  ,a,e,  „„  imc^JlZl'lZ 
as.ump>,„„  of  control  „f  ,|„  „„,       „,  r,,|| "? "  '    h  ^' 

e..s  depend  can  „"u»7.f"  .^fe  v  in  ,  '"""r'  ""'"'"'''  '"'"• 
wording  of  a„  nnre.u,r,X:;:;:?o'f".  p^; i:  Zl™,'  "" 

..p^.in^, ,  »upe™«,He,:!.,r;:;;';a,,;'  •""'""■"='  -'' 

/939)  appeared  a  couple  of  menths  later  th.n  thl 

stnted  by  the  Coal  (RetaU  Prices)  Comminr    TK         P'" 

corroborated  the  conclusions  replied  bT^rBoard'^f  T'' 

Labour  Gaueu,  April,  1915,  p.  ,,7. 


fJll 


1^ 


144  PRICES  AND  PRICE  CONTROL  DURING  THE   WAR 

Committee  on  Employment,  namely,  that  indiscriminate 
recruiting  in  vital  industries,  such  as  coal  mining,  should  be 
called  to  a  halt." 

The  committee  found  that  the  number  of  persons  from  coal 
mines  who  had  joined  His  Majesty's  forces  up  to  the  end  of 
February  was  191,170,  or  at  the  rate  of  27,310  persons  a 
month.  This  number  represented  17.1  per  cent  of  the  total 
number  of  persons  of  all  ages  employed  in  coal  mines  at  the 
beginning  of  the  war  (1,116,648);  but  the  proportion  of  per- 
sons who  left  between  the  ages  of  19  and  30,  i.e.  of  those  who 
were  most  fit  to  undertake  arduous  work,  was  estimated  approx- 
imately at  40  per  cent.'  There  has  been  a  certain  amount  of 
replenishment  of  labor  in  coal  mines  from  outside  sources,  but 
this  replenishment  did  not  make  good  the  loss  due  to  enlist- 
ment. Those  who  left  were  mostly  trained,  young  and  vigor- 
ous men;  those  who  took  their  places  were  workmen  of  an 
entirely  different  character.' 

Enlistments  continued  into  1916,  and  it  was  estimated  that 
by  the  end  of  September,  287,000,  or  more  than  25  per  cent 
of  the  labor  employed  in  the  collieries  at  the  outbreak  of  the 
war.  had  joined  the  colors.^  Because  of  inflow  of  labor  from 
other  industries  and  reentry  of  men  returned  from  the  forces, 
the  actual  decline  in  the  number  of  miners  at  work  fell  be- 
tween August,  1914,  and  June,  1916,  by  13.7  per  cent.  The 
effect  of  the  decrease  in  the  number  of  miners  was  a  decline 
in  the  output  of  coal.     The  following  figures  tell  the  story: 

PRODUCTION  OF  CO.\L»  Million 

January  to  December,  1913 -o,"* 

anuar>- to  June,  1914 '.'.'.':.'.'.:'.:'.:'.'.':.'.'.'.'.  140  o 

uly  to  December,  1914 .J.  ^ 

anuary  to  June,  1915 '.'.'.'.'.'.'.'.'.". 127  6 

uly  to  December,  1915 ,,i  ^ 

anuary  to  June,  1916 ,,0, 

July  to  December,  1916 .tl  \ 

January  to  June.  1917 .j^  ' 

July  to  December,  1917 '.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.  121 .3 

'  Tht  Economist,  June  12,  1915,  p.  1195. 

«  Monthly  Review  of  tht  U.  S.  Bureau  of  Labor  Statistics,  July,  191s,  p  S7 

»  Board  of  Trade  Journal,  Januar>'  24,  1918,  p.  92.         •  ^     '•    '*  ^'  *'■  !>'■ 

*  Labour  Gasette,  January  17,  1917. 

•  Board  of  ,'rade  Journal,  January  31,  1918,  p.  12a. 


GREAT   BRITAIN 


'45 


On  June  i6.  1916.  the  government  prohibited  all  recruitin.. 
from  miners  and  decided  further  vhat  all  miners  i  ^H^rZ 

«hn  WK  '^'^"^  ""•'''  ^''^  ^''^  ""fit  for  foreign  scarce 
should  be  returned  to  the  mines  '  service. 

inT'ia'jr'^f  ^Tmm^^  'r""'  '^"^  ''''^  -'"•-  tons 
lyij  to  257,700  milhon  tons  m  iqi7   at  n  tim^  ,..u      .u 

coun,      b,,,,,,  „,  governmental  re'^^eme^ntrn:;    ^^^^^^ 
more  than  at  any  time  in  her  history.     The  domestic  s^t 

export  of  coal  from  77  million  tons  nT9     :?„  ^/ni;  iio  "Us 
jn  1916  and  38  milhon  tons  in  19,7=  the  babncta^i  able  fo 
nrtor""'''""'  ^^'"'-'^y-d  bunkers  was  thu!' ,0  Ju 

6  r^^v^  ?'  'V^'  '^'  ^"'^  °^  ^°^'  (Limitation)  Act  (5  and 
coaUt  the  v''^  -«  Pa-ed.  It  prescribed  that  the  p  ce  of 
coal  at  the  p.t  s  mouth  should  not  exceed  by  more  than  as  ner 
ton  (or  such  other  amount  as  the  board  might  oder)  the  price 
of  the  same  description  of  coal  sold  in  similar  quantities  under 
month  ""h' H  t"  ''  ^'^  ™-sponding  date  during  the  tuete 
months  ended  June  30.  1914.  The  act  also  limited  the  cha  ^e 
for  transportation  from  the  pifs  mouth  on  trucks  owned  by 

tt  ^ermr- oT^h^cf"- ^^^--^ --^^^^^ 

increase  of  6s.  6d.  instead  of  4s.  was  authorized  by  the  boarS 
n  the  Monmouthshire  and  South  Wales  district  on  July  13 

of  th;Tpa«!;t^alc'omi^^^^^^  Cpn,„,it.ee-third  general  report 

m  the  coal  mining  lndusT,^TueThe^.^r     ?Z1„n'°  "T"!!-!  '  ""  P^^^'^'^ng 
of  the  committee  was  issued  in  D^emb^f,„;;""'^°";  '?}^-     The  s«:ond  report 
lh€  Bureau  of  Labor  StalislUs  n   ,!^^'"^'^-  '^'S;  quoted  from  Afonlhly  Revi^of 
Board  of  Trade  Journal.  Unulit' 24.  .9.8,  p  9, 


f 


146  PRICES  AND  PRICE  CONTROL  DURING  THE   WAR 

After  the  passage  of  the  Price  of  Coal  (Limitation)  Act 
voluntary  arrangements  were  made  with  the  London  coal' 
merchants  for  limiting  retail  prices  of  house  coal,  and  it  was 
suggested  to  local  authorities  throughout  the  country  that 
they  might  make  similar  voluntary  arrangements  with  the 
coal  merchants  in  their  districts.  The  leading  coal  merchants 
m  various  imp:  rtant  centers  throughout  the  country  under- 
took to  limit  charges  added  by  them  to  the  cost  of  coal,  as 
delivered  to  the  merchants,  or  not  to  advance  prices  above 
an  agreed  level  without  first  consulting  with  the  municipal 
authorities.  In  London  a  definite  schedule  of  prices  for  sales 
of  coal  in  small  quantities  was  established,  and  the  London 
County  Council  required  this  schedule  to  be  kept  posted  in 
the  small  shops  where  coal  was  sold  in  penny  worths  and 
similar  small  quantities.^ 

In  order  to  assure  the  continuity  of  supplies  to  home  con- 
sumers a  Coal  Exports  Committee  was  created  in  May,  1915; 
the  next  steps  were  the  setting  up  during  the  second  winter  of 
the  war  (December,  1915-January,  1916)  of  district  coal  and 
coke  supplies  committees  in  diflFerent  colliery  districts  and 
the  establishment  of  a  central  committee,  consisting  of  repre- 
sentatives  of  the  Board  of  Trade,  the  Admiralty,  the  Home 
Office,  the  Ministry  of  Munitions,  the  Railway  Executive  Com- 
mittee, the  coal  mining  industry  and  the  coal  trade.     The 
functions  of  the  local  committees  were  to  arrange  for  the  most 
economical  system  of  distribution  and  in  particular  to  ensure 
adequate  supplies  to  the  war  industries,  while  the  central 
committee  was  entrusted  with  the  consideration  of  questions 
of  policy.     At  first  the  committees  were  on  a  voluntary  basis, 
but  legal  difficulties  because  of  committees'  interference  with 
contracts  made  it  necessary  to  establish  the  system  on  a  com- 
pulsory  basis.' 

On  November  29,  1916,  a  regulation  was  passed  under  the 
Defense  of  the  Realm  Act  giving  the  Board  of  Trade  power  to 
take  possession  of  any  coal  mines  where  it  appeared  to  them 


'  Report  (interim)  of  de\ 
'  Board  of  Trade  Jour 


rtmental  committee  on  prices,  Cd.  7866,  p.  7 
January  24,  1918,  p.  93. 


GREAT   BRITAIN 


»47 


was  at  once  (D^Xr      ,^,,5       ^'  *'"!!''  ""'  "^"'"'"^ 

.je  South  wi.r:X',;,  rSaT  ■tuh'i^r" " 

throp)  wa,  appointed,  as  well  as  an  AdviC  piri         *•  ^'''" 
or  repre^ntatives  of  coal  owners  an.  ^S  mfnT,^'  "'"""""' 

ver^r^xsx'r^rssrtr™-'-™ 

duction, distribution  stora^^»nH  ""■°'  ""  ""^  P"" 

1".  .he  fixin,  of  .^liiTti!^  zrpjir  "Vr  ;rr; 

the  shortage  of  shipping  was  felt  in  tZ       i  ^'^^'^^  "^ 

the  form  of  a  considerable Teductiont  the''  "'"•"'  '^'^  '" 
exported  and  a  serious  fall  inlx^rt  p  ^s  TnnT  °'  r! 
with  the  position  as  retrarH^  o.-  f         "  °"'*'''  *«  ^eal 

th.saleorcoa.wa:rrdt/th:c;:t^^^^^^^^^ 
June  28.  I9I7.  embodying  a  scheduleTp  Les    '/      f^ 
exporting  or  bunkering.'    A  series  n(\l  ™^'  ^"'^ 

directions  was  issued  on  October"  LdtlrH  f"  '""'^ 
were  increased  by  2s  6d  oer  fon  schedule  prices 

to  France  and  Ita^y  'the  £n  '  ^''''''?'  ''-^^''^'  shipments 
rangement.  "  xt' 'scheme  forTh^  "'^  "-^*'^'^«°^  - 
and  Italy  at  limited  c^alnw/       ^    '"'""'^  °'  ""^'  ^°  ^^^n^e 

graded  according  to  their  rel.    1  ^''-     ^''^y  ^'^re 

average,  were  many  shMHn^  """T""''  '■^'"^'  ^"^'  «"  an 

./  J/^  ^'  P""  *^"  '"«^^'-  f*^^"  the  current 

p)^:'  ^"'""■"" ''-'-'  --•  p-  -3= w. .,  rr.. .™,  .„, ,; 


IV 


148 


PRICES   AND   PRICE  CONTROL  DURING  THE   WAR 


¥ 


market  prices.  The  scheme  was  thus  vitally  different  from 
that  which  had  been  in  force  for  the  supply  of  coal  to  France 
since  June,  1916,  for  under  that  scheme  there  was  one  maxi- 
mum price  of  30s.  for  large  coals,  irrespective  of  their  relative 
qualities,  and  of  20s.  for  small  coals.  The  new  fixed  prices 
were  to  be  enforced  without  regard  to  current  market  condi- 
tions.' The  scheduled  prices  operated  as  fixed  prices  in  the 
case  of  shipments  to  France  and  Italy,  and  as  minima  in  the 
case  of  shipments  to  neutral  countries.  Contracts  entered 
into  prior  to  May  1,  191 7,  were  not  to  be  interfered  with,  and 
the  coals  supplied  to  the  Admiralty  were  excluded  from  the 
scheme.' 

The  price  of  coal  in  the  United  Kingdom  was  increased  by 
2s.  6d.  per  ton  at  the  pit's  mouth  in  October,  1917,  in  order  to 
meet  the  cost  of  the  special  war  wage  of  is.  6d.  per  day  to 
adults  and  of  9d.  per  day  to  boys  under  16,  which  was  granted 
by  the  Coal  Controller.     But  according  to  this  new  arrange- 
ment the  coal  owners  who  were  supplying  the  home  market 
exclusively  were  able  to  realize  the  extra  2s.  6d.  on  the  whole 
of  their  outputs,  while  those  who  were  selling  to  France  and 
Italy  were  excluded  from  the  benefit  of  this  additional  amount. 
Because  of  this,  the  concession  granted  by  the  Board  of  Trade 
did  not  represent  more  than  is.  ind.  per  ton  when  applied  to 
the  total  production  of  the  coal  fields.     The  most  affected  col- 
lieries were  those  of  South  Wales  and  those  in  proximity  to 
Tyne  and  other  Northeast  ports.     The  war  wage  advance  of 
Is.  6d.  per  day  was  to  be  paid  to  all  workmen,  whether  they 
worked  or  not;  this  placed  a  heavier  burden  upon  those  col- 
lieries where  the  loss  of  working  time  through  tonnage  scarcity 
was  the  greatest.*    The  government  increased  the  wages  of 
miners  and  passed  the  price  fixing  law  without  consulting  the 
colliery  owners. 

One  of  the  firsc  measures  taken  by  the  Controller  after  his 
appointment  was  the  preparation  of  a  scheme  of  compensa- 

'  TIk  Economist,  July  7,  1917,  p.  u. 
I /6id.,  July  14,  1917,  p.  45. 
•  Ibtd.,  October  20,  1917. 


GREAT   BRITAIN 


149 


tion  to  the  owners  of  the  minps      TK<.  m-  • 
strongly  recommended  the  TZtanl  of    hT'  *^T'^^'°" 
ment  to  the  coal  owners  but^T.T  ^°"*™'  ^«^^- 

the  scheme  that  Has  dLidS  Tl  T"^  T'  "P^^^^^  to 
yoluntary  agreemenT  0:Vc::i:rTsi:'^^7T  1  ^ 
introduced  in  the  House  of  Commons  a  bn"^n«'"'"^ 
give  effect  to  a  certain  agreemenTSn.  tn  .K  '""^""^  ^"^ 
to  be  paid  in  resoect  .^r'^V   ,*'"»*"  ^^e  compensation 

rnatt/s  arisinrr^frLx^^^rbn/::  -'  z'- 

the  Coal   Mines  Control   Agreement   rcLfi  ''^'^  ^' 

One  of  the  main  features  of  t hi  (Confirmation)   Act.' 

by  the  owners  of  95  p7r  cent  ^f  fnr'"«  "''  *'^  ^""^"^^'• 
"profits  standard"  rthatUth    ^  ^™'^*'  '"  "''"^^^  ^^  ^he 

two  out  of  the  Le''y:Lxt:zzr:rV^^^^^^  'r 

years  out  of  six),  the  Controller  receivfnr^wh  J        •     .  ^?"' 
merchant,  bv  diU  ^f     ?^  ?    arrangement  with  wholesale 


North  London . 
South  London 


eet  Sales  from  Trolley 


.d.  per  cwt.  higher  than  the  above  frtTeyl,'rTce  for  the  district 

'fC'';^';^-'''"'"^- J«""-^3..  .9.8.  p.  „9. 
*  Labour  Gau'tU,  February,  1917. 


>s-  lod.  per  cwt. 
Is.  I  Id.  per  cwt. 


;,i 


ISO  PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 

Under  the  regime  of  the  Controller  of  Coal  Mines  the  regu- 
lation of  prices  was  extended  to  cover  both  wholesale  mer- 
chants' charges  and  retail  prices.  Powers  to  fix  prices  were 
confirmed  by  the  Wholesale  Coal  Prices  Order  and  the  Retail 
Coal  Prices  Order  made  by  the  Board  of  Trade  on  September 
5  and  1 1 ,  respectively.  The  function  of  fixing  in  each  locality 
the  maximum  retail  prices  of  house  coal  which  would  comply 
with  the  requirements  of  the  Retail  Coal  Prices  Order  was 
assigned  to  local  authorities.' 

As  the  requirements  of  the  Admiralty  and  of  essential  war 
industries  expanded  enormously,  supplies  available  for  in- 
land consumers  had  to  be  cut  down.  The  situation  became 
very  acute  in  the  spring  of  1917,  after  a  prolonged  and  severe 
winter,  which  had  resulted  in  a  largely  increased  consumption 
of  house  coals.  Strictest  economy  was  insisted  upon  and  the 
London  district  definitely  rationed,  under  the  Household  Coal 
Distribution  Act,  which  was  passed  in  September,  1917,  for 
London  and  a  large  area  around  the  city.  The  unit  of  dis- 
tribution was  the  room. 

No  person  could,  after  October  i,  1917,  sell,  deliver,  purchase 
or  acquire  for  consumption  in  adwelling  house,  flat  or  tenement, 
coal  exceeding  the  quantities  allowed  in  the  following  table: 

.,      ,        ,  .    ,  Coal  allowance  from 

Number  of  rooms  occupied  October  i  to  March  31 

Not  more  than  4 ,  ^^t,         ^^1^ 

5  °''  6 3  cwts. 

' I  ton 

13.  14  or  15 ,  ton. 

More  than  15 ,  tons.  10  cwts. 

For  the  period  from  April  i  to  September  30,  the  allowance 
was  at  the  rate  of  half  that  shown. 

Coal  allowances  in  excess  of  hundredweights  were  to  be 
reduced  in  the  event  of  stocks  of  coal  falling  below  a  deter- 
mined level. 

Additional  allowances  not  exceeding  2  hundredweights  per 
week  were  granted  in  certain  cases:  (i)  the  presence  of  aged 
and  infirm  persons,  invalids  or  young  children,  (2)  the  absence 
of  any  provision  for  gas,  electricity,  etc.' 

'Board  of  Trade  Journal,  January  31,   1918,  p.   lai;  September  20.   1017. 
pp.  621-622.  '     f  i> 

•  Labour  Gaiette,  August  17,  p.  277. 


CHAPTER  IX 
Home  Production  of  Food  luid  Minimum  Price. 

appointed  in  June.  ,915.  onrbXBoarJ  ofT"'';"^  "^'^'^ 
Fisheries,  one  by  the  BoarH  ^f  A„  •  ,  ^^'^"'^"''^  and 
one  by  the  Departmenf  ^wfuT  ^T^^^^  and 

tion  for  Ireland,  "to  considering         ^"^ ^^^''"•cal  Instruc- 

taken  by  legislaiioX  ot  wf^' o^X'  T'  '''''  ^''""'^  '- 
taining  and,  if  possible,  inc^leth^  n  ''"'"'^^  "'  '"^•"- 
food"  in  England  ^nd  wXr^oltrT^'^'r^''''''''' ""^ 
English  committee  was  aor^L^  r  *"''  ^'■''^"^•'  The 
later  it  presented  itsTteSnT^^t "  ^""  ''  ^"'  ^  '"-'»' 
How  t^r:\i^r  :;^- ^t  tl^ain  P^ em  was 

onlyby extend"  gC;Z^^^^^^^^^  be  solved 

would  enable  more  of'the  e^Z  at^M  ,""^"  'L"^"  "^^^'^ 
in  wheat,  leaving  the  newirbrnl?n  .  Jf '^  *"  ^  P"*  ^own 
sary  crops  thus  displaced  ^ueht""ts^^1  '"''  ''^  °*'^'-  "-- 
to  induce  farme.^  and  landlords  00^  '^'^'°"'^-  ^"  ^''^^r 
ods,  with  their  comparat"vetcurTtv  n?""  T '"^  "^  ^'^^''-  '"^^h- 
them  to  undertake  the  re7ZlTnrr'''''^"^*«'"''"ence 

|n  the  face  of  certain  shX'nl^^^^^^^  ''^^H^  -- 

«n  grain  prices  at  the  conrlus,V.n?.f  \u  ^.  °^  ^  P^'^'^'e  fall 

posed  the  guaranteSneof  a  r-  '""■•  '^'  ^«'"'"'ttee  pro- 

quarter  for  all  mallb  e  h  ""^  """''  °^  ^'  shillings  a 

11 

'51 


IT 


ii 


I5a 


PRICES  AND   PRICE  CONTROL  DURING  THE  WAR 


acres  in  1916,  in  which  case  there  would  be  4  or  5  million 
quarters  more  wheat  g^rown  at  home  (an  additional  six  weeks' 
supply  for  the  whole  of  the  United  Kingdom). 

The  committee  recognized  that  a  guaranteed  price  for 
wheat  should  entail  upon  the  farmer  the  obligation  to  pay  a 
fair  rate  of  wages  to  his  laborers;  in  fact,  some  members  were 
evidently  in  favor  of  accompanying  the  minimum  price  with  a 
minimum  wage.  They  contented  themselves,  however,  with 
recommending  that  an  inquiry  into  wages  and  earnings  should 
be  instituted  at  once. 

As  to  the  method  of  carrying  out  the  guarantee,  the  com- 
mittee recommended  that  payment  to  the  farmer  should  be 
regulated  by  the  difference  between  45s.  and  the  Gaxette  aver- 
age price  of  wheat  for  the  year  in  which  the  wheat  is  harvested, 
the  farmer  being  left  to  dispose  of  his  produce  in  the  open 
market. 

The  committee  noted  the  objection  to  thtir  proposal  that 
it  was  conceivable  that  no  great  quantity  of  additional  wheat 
might  be  produced  beyond  what  would  have  been  grown  had 
no  guarantee  been  offered,  and  that  the  state  might,  if  wheat 
prices  fell,  be  obliged  to  pay  a  considerable  sum  for  a  com- 
paratively unimportant  result.  Rejecting  as  unworkable  in 
practice  the  suggestion  that  the  guarantee  should  be  limited 
to  the  additional  wheat  grown  by  farmers  over  and  above 
their  prewar  production,  measured  by  the  harvest  of  1913, 
the  committee  recommended  that  the  guarantee  should  be 
confined  to  those  farmers  who  were  able  to  show  that  they 
had  made  a  reasonable  effort  to  increase  the  production  of 
wheat.  As  a  test  they  proposed  that  a  farmer  claiming  the 
grant  should  be  asked  to  show  (a)  that  he  had  increased  his 
area  under  arable  production  by  at  least  one-fifth  over  the 
similar  area  in  October,  1913,  or,  in  the  alternative  (b)  that 
at  least  one-fifth  of  his  total  acreage  under  grass  and  annual 
crops  was  actually  under  wheat. 

The  committee  considered  the  question  whether,  if  a  mini- 
mum price  wa-  ~ured  to  the  farmer,  there  should  not  be  a 
maximum  price        which  the  government  would  have  the 


CKEAT   BRITAIN 


»S3 


right  to  takeoverall  homegrown  Wheat     \V.»k 

definite  recommendation  ivi  thU  rn!?t      ^V"'°"*"'a'^"'8;any 

gested  that  if.  in  the  02,1  of  .h  '  ""  ™'"'"'ttee  sug- 

pricewasde^irabMtS^'   J:^'^^^^^^^^^^ 

quarter.  ^  """^  **  ""»  'es»  than  559.  per 

decl?;d  r^rrdtVh'etr^^^^^^  r  ~nt 

minimum  price  for  wheat      Th^'"'"""^«  "'"  "^  »  guaranteed 
set  forth  by  Lord  SdhTrL  I''^^^^^"«  f'""  this  decision  were 
ture.  at  a  m'eeting  ^.^prr.„7:th    "^"V'^o''''"^  "^  ^'^••-'- 
Society.  the  Central  C^aXof  A     '''i''"^'' ^«"^"'*"^«' 
Farmers'  Union  and  other  or^'tJ-^"'""^'  '^'  ^*^'""«' 
London  on  August  26     iZdZZ"""'  ""^''^  ^'^^  ''^'^  '" 
after  the  reporf  had  been  rlive^tTe'  '''•"',  ^'^^  '''°^»'y 
for  1915  came  to  hand     A^rZ        .     ?«^«^"'t"ral  returns 
500.000  more  acres  of  whea   ZT'"'^-''''^  '^'^'  '^'^^  ^ere 

neariy3o per  cent,  whiirth^  ncrel'        '"f "'  ^"  '"^'•'^^-°f 
•n  sheep450,ooo.     In  viewo  I?  ^ '"'^"'^^^«3«4.oooan^ 

fact  that  the  call  of  a^^lull^^^^^  ^^"''^' "'  the 

very  heavy  in  the  coSTyear  ofl^r '"  '1'  ^°'°"  *«"'^  ^ 
in  Canada  and  Australia  and  of  thlfin'^'f""^^"'  ^^"^"^'^ 
would  prevail  afterthe  war  thl  "^'  stringency  which 

would  not  incur  the  adSt?r'''"r"*'^^'^«^*hat  they 

the  proposed guarantio   a   'Lf  "'"'■'' ''"^'''^y  •"^«'^«'  •'" 

On  Octobef  15    19^.    ..r  ""  ''"'"  ^°'"  ^''^^^• 

report  (Cd.  8095)      The; a^L'ZZ'""  "'^""^"^  '*«  ^"^1 
their  firm  conWction  that  ?hl°^'''*'"°PP«"""'ty  of  stating 

grass,  which  hasTken  Xe  .VZT"  ""l  ^^^'^'^  '^"^  '"*« 
acres  during  the  last  40  y'rrs Id  Is's'^m"'  "'  ""^'^  '^'^'^^ 
to  result  in  a  diminution  of  ^.?li  still  gomg  on,  was  lx)und 
of  this  land  ^■^Zc:^[^or^^^  ^"^^  --»> 

while  at  the  same  timeTrXir^      .''"u  ""^'^  '^'  P'«^. 
tion.     The  remainder  of  the  fi'-f  '°.'  ''"'"""  *^°"«"'"P- 

vision  of  fertilizers  and  f^  '^^''  ^^^'*  ^'^h  the  pro- 

labor  saving*  maThi^^i':^^  Te'^J'  ^^-^•"^-  i. 
Attention  was  also  called  fn?.,  ^'"P'oynent  of  women, 
and  villages  for  t^e  ^t^Jc^n  :fTeglr !  '^"'  '"  "^^ 


I 


154 


raiCES  AND  rRICE  CONTROL  DURING  THE   WAR 


The  report  of  the  Scotch  committee  contains  no  recommen- 
dation  as  to  the  establishment  of  a  minimum  price.  The 
advisability  of  resorting  to  artificial  means  in  order  to  stimu- 
late the  production  of  wheat  was  considered  by  the  committee 
and  some  of  the  witnesses  gave  evidence  in  favor  of  a  guar- 
anteed  minimum  price,  but  they  did  not  see  theit  way  to 
overcome  the  practical  difficulties  which  were  likely  to  arise. 

The  Irish  committee  recommended  that  the  government 
should  guarantee  a  minimum  price  for  oats  and  wheat  for  one 
year;  they  expressed  the  opinion  that  in  view  of  the  risk  of 
loss  run  by  the  farmer  in  breaking  up  grass,  there  would  \ye  no 
departure  from  sound  economic  policy  in  agreeing  to  a  mini- 
mum price  to  secure  him  against  contingencies.  No  actual 
figures  were  suggested  for  the  guaranty. 

The  question  of  guaranteed  minimum  prices  for  wheat  and 
for  oats  was  brought  to  the  front  in  connection  with  the  Corn 
Production  Bill,  which  Mr.  Prothero  introduced  into  the  Par- 
liament in  the  early  part  of  1 91 7.  For  the  purpose  of  obtain- 
ing a  larger  home  grown  food  supply,  the  bill  proposed  that 
the  following  minimum  prices  be  fixed  for  wheat  and  oats  of 
the  following  years: 

Wheat  Oatt 
perQr.                                              per  Qr. 
60  O   38  6 


1917; 

1918 
I9I9 

1930 

193 
1933 


35  o 


45  o 


3»  o 


34  o 


The  average  price  was  to  be  arrived  at  from  the  weekly 
averages,  ascertained  in  accordance  with  the  Corn  Returns 
Act,  during  the  seven  months  beginning  on  September  i .  As 
a  corollary  to  guaranteed  minimum  prices,  the  bill  provided 
(i)  a  minimum  wage,  to  be  fixed  by  an  Agricultural  Wages 
Board,  which  would  aim  at  securing  for  able  bodied  men 
wages  which,  in  the  Board's  opinion,  are  "equivalent  to  wages 
for  an  ordinary  day's  work,  at  the  rate  of  at  least  25s.  a  week" ; 
(2)  a  restriction  of  the  power  of  landlords  to  raise  the  rents  of 
existing  tenants.     The  Board  of  Agriculture  could  enforce 


CHEAT   HRITAIN 


I5S 


«l.oa,  „r  ™,.  which  ho  pMuc«l  a^J'^H  '  '""  "'""'■'  »' 
d»c™„cc  hc,.e.„  .he  a'Zr^™',:;' °  """!  """'1  •"  ">« 
per  quarter.  ^    ^        ^"^  ^"*^  niininium  price 

war  measure      The  ^nl  ^■*'"  ^"'"''y  *^"P««'  as  a 

by  the  Prime  MLl^rZlT"""'  u'  ''"  '^'''  ^^  '"-de 
The  measure.  werro:Ui'"eci'  ZtZ  of'th^T  '''  /-^- 
Policy  Subcommittee  of  th^  p^  •       ^''^  Agricultural 

85.*),whichwa..p;,"„'XAz:r;r  rr""-™  «■"• 

prices  recommended  hv  thw  «„h^         •  ^         ^''*'  guaranteed 

receive  from  the  slate  the  digSL   ,  ''""""■  ""■''  "> 

•he  C.««,  average  Ive  for  Z  ■""  """  P"'-"  »"<) 

having  expressed  KS  ll  f?'"'!'  ^^'"°"K  '"any  "thers) 
the  subject  l^a^  ici  •Kk^e^'^rf^  ^  ^^''^'"'^"-  ^ 
the  periodical  pointed  out  that  th^  '"?  for  Agriculture," 

production  in  agricuUurl  we  p  '"'?"'  ^"'" '''"  ^"^'^^  '«^ 
tenure,  half  serfTabo  "aek  of  hr^'""'''""'  ^^^'^"^  "^  '«"d 
Pnse  cooperation,  per^  Tun/ertT^  T"^''  -^- 

not  be  cured  by  cuaranf^^^  •  J,         conditions  could 

The  Corn  Bill^rs  "£^f  "TJ".^  ^^  ''''''  ^"^^'d'-- 
protect  thecomlni  y      jf^fh      ^^'"^^  "'  '^^  '^''"^^  ^o 
the  House  of  Commons  on  Mv^"?'  T  '"  ^''^  ^^^^^^  i" 
-a^lordwereguara^;^'— ----^^ 


i 


s 


18ft 


PRICK*  AND  nU'U  CONTROL  DURING  TUB  WAR 


the  extra  efforts  they  were  aslcefl  to  make,  but  that  the  bill 
contained  no  pnn-i»ion  for  claiming  for  the  state  any  part  of  the 
extra  profitii  which  were  by  no  meana  unlikely  to  be  realized. 
This,  according  to  the  critics  of  the  bill,  was  unfair  to  the  tax- 
payer who  shoulders  the  liability  in  case  of  loss.' 

Mr.  Runciman,  who  was  President  of  the  Board  of  Agricul- 
ture from  1911  to  1914,  suggested  for  improving  the  wheat 
situation,  instead  of  guaranteed  prices,  the  storage  of  corn,  an 
adet|uate  labor  supply,  rural  housing,  the  extension  of  agri- 
cultural education,  cooperation  and  farm  experiments.     As  the 
Kound  Table  correctly  commented  on  these  suggestbns,  though 
admirable  as  a  peace  program,  "  they  sounded  singularly  un- 
helpful in  the  present  crisis  of  rhe  war."»    This  magazine  con- 
siders the  guarantee  an  ingenious  way  of  giving  the  farmer  a 
stimulus  for  the  cultivation  of  cereals  without  the  setting  up  of 
a  tariff  and  its  accompanying  uncertainties  and  inconveniences. 
Others  who  were  in  favor  of  artificial  aid  to  agriculture 
attacked   the  government  for  not  having  acted  upon  the 
advice  of  the  British  committee  in  1915;  they  reproached 
the  government  because  of  its  short  sightedness,  neglect  and 
oversanguine  view  regarding  the  submarine  peril.'    Even  th*' 
Spectator  came  out  in  the  support  of  the  Corn  Production  Bill, 
"because  England  is  a  besieged  nation." < 

At  the  beginning  of  January,  1917,  the  Food  Controller 
fixed  the  minimum  price  to  the  growers,  for  wheat  of  first 
quality  of  the  191 7  crop,  at  608.  per  quarter  of  504  pounds. 
Minimum  prices  were  fixed  at  the  same  time  for  oats  and  for 
potatoes.'  As  this  guarantee  came  practically  too  late  in  the 
season  to  have  very  much  effect  on  the  acreage  under  grain, 
one  may  safely  state  that  during  the  first  three  and  a  half 
years  of  the  war,  except  for  receiving  some  supplies  of  fertilizers 
and  feeding  stuffs  and  some  advice  and  information,  the  farm- 
ers were  not  interfered  with  in  their  activities  by  the  state. 

t  ri!  fffTTJ-VT"  '*•  '9'7'  P-  7»7:  July  14. 1917. 
■  /«<  Kound  TabU^June,  1017,  p.  554. 
.  r.-, .  ..™     _     ■  ""  jblera  andlet 


•  Politicus:  "The  Food  Problem  an< 
P-  435- 
Spectator,  July  38 


Solutkm,"  Tkt  Fortnithtiy  Review,  vol. 


•  The  Spectator,  July  a8,  1017,  y.  ,„. 

»  Board  of  Trade  Journal,  January  11,  1917,  p.  96;  February  15,  1917,  p.  485. 


,  p.  78. 


OREAT  BRITAIN 

wnce  the  outbreak  of  the  war;'  "'  >'''»" 

WW. ,8^*     <r     r      r 

SJi"::::::::--  JS^    ?--    HV.Z    -^ 

ao.«64.ooo     aa.3o«,ooo     ji  ,u«S       J' '*»"»' 

'**"°~  ^'-»^««  «.4.8,oo^  "^^.i^t;^ 

"""" ^'^      ^3^^      ..i^:^       a.£^ 

anJilirrrolt:^.""""*^"  ^^^  ^— ^  '— "  ..., 

IJ;;;^ ":::::::  'Ti^Z      TS^       ^^ 

,„,,,^  -i:5?f??         Jl£^ifoo  +8^$;«« 

total  corn  crapt. . .  •?*■.«»«« ^"  — — -—_ 

Poutoe.  '•'•'^  ''■'^■'■««  ^^^^I^ 

'•'^•°°°  •••"^'««'  +.56.O00 

A  compulsory  census  taken  in  Anril   in,«  l    , 

'ng  acreage  under  the  le.  din^  !^ops  '  ^^""  *''"  ^""°*- 

C«,p  liNCLA-..        •.,   ,VALES 

^'*f« ^""  'nc«aieoveri9i6 

Barley •       3,665.000        +7tjnnn  ■      ,, 

Oat..'.    .         ,49i>.ooo        +5!^^         -^y^o 

"««'«*• .  ••  6«2.000  +,80,000  Tito 

Total  of  com  and  potatoe.  T —     — ll__ 

»>.302,ooo     +a,04,,ooo 


1 1 


158  PRICES  AND  PRICE  CONTRM-  DURING  THE  WAR 

Scotland  and  Ireland  were  300.000  and  i  ,500,000  acres,  respec- 
tively,  making  a  total  increase  of  over  4,000,000  acres.    On 
the  dint  of  the  above  figure  the  Director  General  of  Food 
Production  estimated  that  if  an  "average"  crop  is  realized 
the  United  KinpHom  harvest  of  1918  will  supply  four-fifths  of 
the  yearly  requucment  of  breadstuffs,  as  compared  with  one 
quarter  of  the  year  1917-18  and  one-fifth  of  the  year  1916-17. 
The  Economist  warns  against  accepting  the  latter  part  of  the 
report  on  its  face  value,  as  it  is  based  largely  upon  "estimates  " 
and   "anticipations"   and   not   upon   definitely  ascertained 
facts.  •    A  similar  view  is  held  by  the  Statist.    This  periodical 
renimds  its  readers  that  the  average  yield  of  crops  has  fallen 
rather  heavily  since  the  commencement  of  the  war  and  that 
further  developments  in  this  direction  are  possible.' 

The  rising  price  and  t:ie  shortage  of  fertilizers  and,  to  some 
degree,  of  feeding  stuffs,  coup!ed  with  the  withdrawal  of  labor 
from  the  land,  all  tended  to  diminish  the  average  yield  per 
acre.  In  comparing  the  yields  of  some  of  the  chief  crops  in 
the  three  years  affected  by  war  conditions  with  the  standard 
of  the  previous  ten  years,  one  obtains  the  following  results  for 
England  and  Wales.* 

AVERAGE  YIELD  PER  ACRE 

Increaie 
1905-14  1915-17  or 

Decrease 
^  Busheta  Bushels  BusheU 

Barley::.::::::;::::::::: \\l         s*         -*« 

Oau Ill  30.3  -2.9 

Beans %\  33-8  -,.4 

Peas..  12  3  *5  0  "5  3 

»6  4  23a  -3.2 

In  the  United  Kingdom  the  number  of  cattle  increased  from 
12,184.000  in  1914  to  12,342,000  in  1917.  an  increase  of  158,000 
head;  the  number  of  sheep  declined  from  27,964,000  to 
27,771.000  a  decrease  of  193,000,  and  that  0/  pigs  from  3,953,. 
000  to  2,999,000,  a  decrease  of  954,000. 

'  The  Economist,  June  1,  1918,  p.  940. 
•  The  Statist,  June  8.  1918.  p.  983. 
•Rew:o/».  ci/.,p.  45. 


GREAT   BRITAIN 

'59 

Ae  United  K,„gd„„,  ,„.  ,^-^^,  ^ ytt  ^r'""""'""  '" 

Home  Brown  '''•*  '"*  '9IS  luifi 

sfey^*  ^^^  "^s  ■■%  -is^  .^^ 

''r5^or„"^"'=''''''«i       **''''"      ""•"''      "'•'"       '«*7.309       ,5«.ooo 

^'killed'""'    ""^    f^"  '*"  ^•^*'         "•'«         ^-^         66.000 

^        '°-'45  7.852  a.55,  „ 

Tout.....  ~  , —•  —  — 2£:  f*7      

...  ^     '■''*•'"*'  '-^'^.srz  ..784,539  r^;;:^  r^^nr 

r*. Economic,  March  30,  .9,8.  p.  53^.  "         "'^ 


1| 


CHAPTER  X 

CriticiBm  of  Price  Fixing 

Criticisms  of  price  fixing  have  been  numerous  and  varied, 
the  arguments  used  by  the  critics  ranging  from  a  blanket 
assertion  that  "high  prices  are  nature's  cure  for  scarcity"  to 
most  elaborate  and  painstaking  demonstrations  as  to  how  this 
or  that  measure  passed  by  the  government  affected  the  pro- 
duction, importation  and  distribution  of  some  particular  com- 
modity. The  dangers  of  governmental  control  of  prices  as 
pointed  out  by  its  opponents  are  double  in  character,  political 
and  economic.  The  political  danger  lies  in  giving  too  much 
power  to  uncontrolled  Cabinet  authority  and  in  making  the 
people  rely  more  and  more  on  the  government  for  action  in 
order  to  remedy  conditions  which  can  best  be  met  through 
the  exercise  of  private  initiative  and  through  the  operation  of 
economic  laws.'  The  government  begins  to  regulate  prices 
largely  because  of  the  pressure  of  public  opinion.  But  as  the 
lowering  of  prices  when  there  are  not  enough  commodities  to 
go  around  can  not  satisfy  the  demand,  the  only  tangible  results 
of  it  are  inconveniences  and  disappointments.  People  go  to 
the  shops  in  the  expectation  of  obtaining  food  at  the  legal 
price  and  after  waiting  for  hours  they  go  away  empty  handed.' 
False  hopes  are  raised  and  dissatisfaction  and  discontent 
result.  People  are  made  to  believe  that  high  prices  are  the 
result  of  artificial  manipulations  removable  at  will'  and  not  an 
"inevitable  consequence  of  the  world  conditions  brought 
about  by  the  war;"*  they  clamor  for  stricter  measures  of  con- 
trol and  for  more  price  regulation. 

In  discussing  the  reasons  for  and  the  value  of  high  prices  the 
assertion  has  been  repeatedly  made  that  the  rise  in  prices  indi- 

•  The  Spectator,  January  23,  1917,  p.  692. 
'  Ibid.,  March  31,  1917,  p.  382. 

'A.  Shadwell:  "Food  Prices  and  Food  Supply,"  The  Nineteenth  Century  and 
After,  April,  1917,  p.  736. 
*E.  Cannan:  "Industrial  Unrest,"  The  Economic  Journal,  December,  1917. 

160 


GREAT    BRITAIN 


I6i 


catesone  of  two  things,  either  increase  of  demand  or  shortage 

sa.^  The'^acV  "  ^"'^ V'"""^*^""  ^  ^'^^  ^^^  -«^  "-- 
^Z:r  "  V  *""  consumption,  as  an  ehminator  of 
waste,  as  well  as  a  factor  stimulating  production  and  importa- 
tion     It  IS  madness  on  the  part  of  the  government  to  arti- 

t.S  ^T  f ''  *"''  P"'^'  ^  ^y  ^^^'^  interference  they  are 
taking  the  first  step  towards  creating  the  shortage  which  in! 
imperative  to  prevent.' 

ear^?Ld"'ff  ""'  ''"'!;  "^'^^  commodities  from  the  ends  of  the 
thev.r.         7 '"  '"^"^^'"^"'  f"--  -"'urging  production,  but 
they  are  supplying  the  ver>-  means  by  which  the  expansion  o 
business  can  be  carried  on.     "EflForts  to  increase  <.utput  now 
;nH    K  T"^^  "P*'"  '  '^^^'  °^  ^°«t«  that  is  temporary 

:nd  : -.rnTlLrade-l^^  ''-'  ^^  '-'  ^'^^  ^^"^  ^"  - 

to  sa  i  ?v  thVr  '^"' c-  '''"^"""  "'^"^  °"*P"*  -  needed 
Wast  u.^.  demand.  Since  the  war  began  many  discarded 
bast  furnaces,  many  abandoned  mills  have  been  refitted  and 
put  once  more  into  operation.  These  are  often  worked  bv 
inexperienced  laborers,  the  cost  of  production  of  such  pints 
IS  necessarily  high  and.  as  long  as  their  output  is  needed 
must  be  met  by  high  prices  for  the  finished  products 

The  most  important  consideration  before  the  country   as 
has  been  pointed  out  by  Mr    Runriman  In   h; 
snpprh^c   ar.^        u      L  Kunciman   in  his  numerous 

speeches,  and  as  has  been  asserted  by  many  other  speakers 
and  wnters.  is  not  the  question  of  price,  but  that  of  suppf" 
by  restricting  prices  the  government  is  "encouraging  consSmp 
t.on.  discouraging  production  and  preparing  disaster '"'^ 
It  IS  much  easier  to  fix  maximum  prices  than  to  ensure  the 
availability  of  supplies  at  such  prices.  After  the  pr^e  has 
been  fixed  the  government  must  see  to  it  that  people  who  ou^ 

that  tT/fr"^  'u  T  "'*'^"  ''''"'  ^'■""^  sale  in'expectatL 
that  the  price  will  be  raised,  and  that  farmers  and  manufar- 

I  ru'  if^'^''"<":-  February  6,  1915,  p.  181 
,  I'^E.conomic  World.  July  21,  1917   p   78 


I  ft!  11  ifl 


I62 


PRICES  AND  PKICE  CONT«OL  DURING  THE   WAR 


il 


w 


turers  continue  production;  this  is  equivalent  to  industrial 
conscriptioo  in  an  extreme  form.'  Without  such  conscription, 
a  necessary  corollary  of  arbitrary  maximum  prices  fixed  iielow 
the  ruling  market  prices,  "a  period  of  acute  shortage  even  of 
starvation  for  the  poor  can  be  easily  brought  about."' 

When  price  fixing  is  once  begun  there  is  no  way  of  stopping 
it.     One  can  not  thrust  the  ramrod  of  maximum  prices  into 
the  delicate  mechanism  of  industry  and  commerce  in  but  a 
few  arbitrarily  selected  places.'     It  is  idle  to  fix  prices  for  a 
few  cereals  and  tubers,  leaving  other  foodstuffs  unregulated. 
Such  procedure  opens  the  way  to  substitution  and  it  may  lead 
to  total  disappearance  of  the  regulated  articles  from  the  mar- 
ket.     If  the  price  is  fixed  only  for  milk,  milk  may  be  converted 
into  butter;  if  the  price  of  butter  is  also  regulated,  milk  and 
butter  may  be  converted  into  cheese;  if  cheese  is  added  to  the 
list  of  controlled  foods,  milk  cows  may  be  converted  into  beef; 
if  the  price  of  beef  is  also  fixed,  the  farmers  may  withdraw  en- 
tirely from  dairying  and  cattle  raising,*  and  so  on,  until  the 
policy,  in  order  to  have  any  chance  of  success,  is  extended  to 
all  the  products  as  well  as  to  all  the  processes,  the  materials 
and  the  labor  involved  in  their  making.     According  to  the 
Bankers'  Magazine  "the  only  just  and  fair  system  for  regulat- 
ing and  controlling  prices,  in  an  equitable  manner,  is  to  fix  all 
prices :     ( i )  the  prices  of  all  commodities— all  articles  of  mar- 
ketable wealth:  (2)  the  rates  of  hire— rent,  interest,  freight 
for  every  kind  of  both  fixed  and  circulating  capital ;  (3)  the 
rates  of  hire— wage,  salary,  pay— for  every  kind  of  both 
skilled  and  unskilled  labor."' 

This,  however,  leads  to  the  binding  of  the  entire  trade  of 
the  country  into  an  inextricable  tangle  of  official  regulations; 
it  involves  the  appointment  of  numerous  boards  and  com- 

'  pe  Saturday  Review.  September  9,  1917,  p.  242;  also  The  Spectator,  vol.  117 
1916,  p.  465  In  the  latter  an  attack  is  made  on  Mr.  Barnes,  Labor  member  in 
the  House  of  Commons,  for  his  speech  demanding  among  other  things  the  fixing 
ot  the  price  of  milk  and  making  it  a  penal  offense  for  any  farmer  to  give  up  the 
business  of  dairying.  »         »-      >= 

•  The  Nation,  January  2,  1917. 

•  /hid..  January  20.1917. 

*  ihe  SiUurdtty  Review.  September  9,  1917,  p.  242. 

*  Bankers'  Magazine,  January.  1918.  p.  94. 


GREAT   BRITAIN 


l«3 


Beginning  wieh  the  promulgation  of  a  four  „,,)„  ,    . 

pletetheconWonandtherrea./rt^rll'r:^"'"'- 
at  rte  in7rf  ™:",'hr  r'""' "'"*"°"'  '""'"»'  P""-"*"" 

andtrmi.°tli'L';  p ,  ie:r.Trhr"'"  ""™™'>"' 

out  of  the  war      Th«  Jn      •  P"'''"'  ^"^^tions  arising 

i"di,ec.ts,^^;:i'"arLr„T"^  "^^''  *"«'^  - 

Agricultural  and  Fisheries  BnarH  cr,A  d       i   ,     . 

Cammittee;  Fish  Food  and  Motor  Loan  S^n^^  ei':"^^^^ 

Sr^rsZT.* r=  '^"'''  ^^'"*^^  f'^*^  Con^mittee:  F^heries 
sea,  (Scottish)  Committee;  Flour  Mills  Cnntr^]  r         .^' 

Food  Ministry;  Food  Production  Ad v^X^^^^^^^^ 
Production  Department; Food  Production  in  IreTnd  Ad'vf.^^ 
Committee;  Food  Production  in  Ireland  Depar  men  al  cZ 
mutee;  Food  Production  in  Scotland  Committee   F^stuff: 

^^:^l^!::::';r  ^^7"^^"-=  Forage'arn:^: 

Produce) ,  Fruits  (Import  Licenses)  Committee;  Grain 

^^;i.  Hilton:  "The  Foundation  of  Food  Po.i,-y."  TH.  E4in„ur,H  R^e..  July 
Janu^:  ""S;;;:"!^^'  ''-"  -d  Supplies-A  Vicious  Circle,"  For,„.,>.Uy  Re^ 

Pl.e.-A  V.C.OUS  Circle."  F^rtni'tSily  Re,^Z^i^X\^,X''r^5       "" '"'"'^  '''"'" 


li'. 


f  . 


!*♦ 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


m 


and  Potato  Crops  (1917)  Committee ;  Grain  Supplies  Commit- 
tee; Import  Restrictions  Department;  Indian  Wheat  Com- 
mittee; Kitchen  (Central)  Committee;  Leather  Supplies  Com- 
mittee; Meat  Supplies,  Interdepartmental  Committee;  Milk 
Distribution  Committee;  Oats  Control  Committee;  Pig 
Breeding  Industry  (Ireland)  Departmental  Committee;  Port 
and  Transit  Executive  Committee;  Poultry  Advisory  Com- 
mittee; Committee  on  Production;  Rationing  Consultative 
Committee;  Relief  of  Distress  Committee;  Sugar  Supplies 
Royal  Commission;  Tea  Advisory  Committee;  Tea  Control 
Committee;  Wheat  Executive;  Wheat  Supplies  Royal  Com- 
mission ;  W'ool  Purchase  Central  Advisory  Committee. 

In  discussing  maximum  price  fixing  for  agricultural  prod- 
ucts, the  Nation  asked  very  pertinently:  "  Does  Mr.  Prothero, 
when  he  says  a  farmer  can  get  a  profit  at  £6,  mean  any  farmer, 
or  a  farmer  with  the  best  potato  lands?"  It  called  attention 
to  the  folly  and  injustice  of  fixing  selling  prices  not  merely  for 
existing  but  for  future  supplies,  without  any  guarantee  against 
further  rises  in  the  cost  of  production.' 

The  Spectator  called  attention  to  the  profound  mistake  made 
by  Me  government  in  assuming  that  it  can  regulate  agricul- 
tural produce  with  the  same  ease  that  it  can  control  the  out- 
put of  staple  manufactures.  The  factory  is  designed  and 
equipped  for  one  more  or  less  narrow  line  of  product  and  is 
incapable  of  being  readily  diverted  to  any  other  line.  The 
manufacturer  keeps  books  and  his  business  can  be  easily 
supervised.  Agriculture,  on  the  other  hand,  is  carried  on  by 
a  great  number  of  farmers,  who  do  not  keep  books  and  produce 
a  variety  of  foodstuffs,  altering  their  production  as  prices 
fluctuate.' 

The  food  administrators,  writes  Mr.  Hilton,  have  hovered 
confusedly  between  penalizing  the  food  producer,  out  of  ten- 
derness for  the  poor,  and  spoon  feeding  him  to  the  greater 
prosperity  of  agriculture.  At  one  moment  he  must  sell  his 
milk  for  less  than  it  is  worth;  at  another  he  must  have  a 

"  The  Nation,  January  ao,  1917. 

*  The  Spectatcr,  Auguit  4,  1917,  p.  lia 


GREAT   BRITAIN 


I6S 


bounty  if  the  price  of  grains  drops.     "  Yesterdav  h.  ™     . 
rpce  ve  more  oer  ton  for  ♦!,»  ,  yesterday  he  must  not 

matter  of  two  letters^^  '      ^'  ^"^''^^^  '*  '^  °"'y  * 

experienced  men  in  those  industrial  actTv  ties  w£ch   ^     T'' 
action  is  „kery  ,„  lead  i„.„  a  4 TdS!;:,'       ""'''  """ 

s,i.'u,a.a?^:dJ!'or.t^„^o:^T'"^','''■^  ■'  ••■ 

and  to  «e  ,ha,  ,he  tonnage  available  is  us^  ^^'^  7"^"' 

r„ne,™r;e;u--i="°-^^^^^^ 

•  Hilton:  0^.  cit.,  p.  47-48. 
/r<«.  a,^  Coal  Tra^s  Kevia,,  London.  August  ,0.  ,9.7.  p.  ,37. 


1: 


Is 


Ki     d 


I  lit 


l66 


PRICES  AND  PRICE  CONTROL  DURING  THE   WaK 


a  business  with  which  he  atone  had  actual  experience  in  the 
past.' 

The  goveiummt  in  iu  control  of  trade  hai  for  the  mo«t  part  overlooked  the 
merchantt'  collecting,  conierving  and  distributing  functi<Hit  and  acted  on  the 
■Humption  that  products  must  ineviubly  be  olTered  to  the  people  in  the  United 
Kingdom.  That  assumption  can  be  justified  by  the  expecution  that  the  country 
is  ready  to  pay  higher  prices,  and  this  is  just  the  contingency  which  the  government 
wishes  to  avoid. 

Instead  of  emptoying  merchants  and  their  correspondents 
and  agents  in  all  parts  of  the  world  to  scour  their  respective 
fielu  the  government  does  nothing  in  many  fields  except  to 
fix  prices  or  limit  imports,  thus  checking  production  and  stop- 
ping the  machinery  by  which  production  is  fostered.'  The 
merchants  asked  in  their  report  for  more  enlightened  control, 
a  control  that  would  check  speculation,  but  would  not  break 
up  the  mercantile  system  of  the  country. 

The  feeling  of  dissatisfaction  in  commercial  circles  against 
the  methods  adopted  by  departments  of  the  government  in 
controlling  and  restricting  trade  has  been  steadily  growing. 
A  public  meeting  was  held  in  London  on  October  25,  1917, 
under  the  auspices  of  the  London  Chamber  of  Commerce,  to 
protest  against  the  administrative  methods  used,  particularly 
in  connection  with  the  import  and  export  business  of  the 
country.  Opinions  were  expressed  that  the  merchant  com- 
munity was  disregarded,  activities  of  importing  merchants 
seriously  reduced,  and  that  the  effect  of  this  was  a  serious 
shortage  of  supply.*  All  sections  of  the  business  community 
demanded  that  the  government  should  cease  to  act  as  inter- 
mediary between  producers  and  consumers  and  should  largely 
call  upon  those  who  have  a  practical  acquaintance  with 
particular  trades,  to  assist  and  direct  the  various  control 
departments. 

In  calling  attention  to  the  views  expressed  at  the  merchants' 
mass  meeting,  the  Statist  wrote  that  these  views  were  those  of 
a  section,  but  of  a  section  of  such  importance  in  relation  to 

I  The  British  Trade  Jnurnal,  September  I,  1917,  p.  326. 

•  Ibid.,  p.  326. 

'  Chamber  of  Commerce  Journal,  December,  1917,  p.  297. 


GREAT  BRITAIN 


167 


worthy  „,  very  .„i„„.  ^^^^>:^  ^;^'':j;'^''^ ^''y 

oppos  ng  any  form  of  ratmn.^  aaopted  a  resolution 

lie  distribultd  throush  the  exi.iin.  m.,i,L  "  "''''' 

equable  distribution'  Ret^TlZ^' T/"'"".'""' 
•mall  advisory  corainittee  of  „,k  .  j  /  *""'  ""'  'i 
.held  a»is,  the  FZcrn-rLneT       ""  """"■'  "^  °*" 

'f  the  control  exercised  by  the  Kovernmpnt  hn   » 
for  criticism,  its  failure  to  exerci^anT  ,h-    f"  ^  "*^ 
weapon  of  finance  was  al^n  .tZu   ,       ^'      ^°"^^  '*"  »•■««* 
was  cmphasiz"   thlt  byTattnit^^^  '' 

citizen  by  drastic  taxation  thlrJ^      n   '"^'''^  ^'''''  "^  ^^e 
reduced  t^iie  n  ^   oTclt^oU„d  t"'/  "  "'^'^'^^-^  ^^^^'^ 

profiteering.  ir  ^ul  *"^  suspicion  of 

sr-r;^^-="J^?^th- 

taxing  them."*  ^    *     '     '     ^^ ''""^"g  the  profits,  by 

•  The  ^momxst,  February  16.  i|  8  p  jfe 
rfe  5Mtotor.  January  la.  ,9  |'p'  P,*'**- 


■iiiH 


f:  ■ 

6i 


"kl. 
1^, 


,1  3 


M 


iif  r 


APPENDIX  TO  PART  I 


f'  : 
1 1 


f 


MKROCOrV   RBOUITION   TBT  CHART 

(ANSI  ond  ISO  TEST  CHART  No   2) 


^HJ4 


^  APPLIED  IM/CE    I 

:SP^  ^65 J  East  Main  Stre«t 

^^S  Rocheittf.  Utw  York         1*609       USA 

^S  (7 '6)   *a2  -  OJOO  -  Phore 

^S  (^16)  268 -5969 -Fa, 


IM 


THE 


■  Lahou,  Ga-uiu  (Canadian^.  September.  ,9,7, 


P-  74^. 


1«(!:!< 


II 


K 


«7i 


"!P 

I 
f 


» 'I 


172  PRICES  AND   PRICE   CO?fTROL  DURING  THE   WAR 


THE   RISE   IN  THE   RETAIL  PRICES  OF  FOODS' 
(Prices  in  July,  1914-160) 


'Labour  Gaxut  (Canadian),  September,  1917.  p.  741 


GREAT   BRITAIN- 


173 


Years 


«9I3 


I 

II 

III 

IV 


QUARTERLY   MOVEMENTS  OF   PRICES' 
Summary  of  Index  Numbers,  1867-1877- 100 

I 


^   . 

71.6 

69  3 

65.8 


I? 

Is 

<"' 
101.5 
99  I 
99  I 
98.7 


■is 

55-7 
52.7 
52.1 
54  o 


I 


f2 

79  2 

77.7 
76.6 


en 

,c 

S 

113. 1 

"4  4 
no. 


75-4  104.8 


I 
5 

83.0 
81   I 

85.2 
86.7 


«4.2 

83  2 
83  2 
83.3 


.a 
I- 
«< 

s 

91  6 
90.9 
91  I 
90.1 


f2 


86  J 

«5.3 
85  o 

83  9 


•A 

44  9 

45  2 
45  6 
44  « 


«2  3  83  4  43  7 

86.9  «2   o  4».i 

88.1  «8   I  J9.4 

91   I  9"  I  37  I 


'914  66.6     98.7  52.0    75.3   .04.4    8v.     84  , 

I  tl^    ^^-^  "  •*     75.2    98.4    829    nil 

III  80.3   102  o  61. 5     84.4    96.2     82  4     l-  , 

IV  90..  ,009  63.9   Hit  lr.2   77.1   9ri 

""    n  Jo1.4° ;]^:o'  ^3^ ;c^ « ;-°  «5 4 .04 2 ,...0 ,0., ,,  .,79 

IV  ..3.8,239  68.7  .olo  .3.2  .?i5M?9%^  -^i  -Vi     ^7  9 

""         II  .'2^:'   'f7^  ^8l  Wti  III',  "«•'   '•^"   '-^-^  -^7  «    45  5 

P-  70.  '  '"'•'•  P-  '^''  '"95.  p.  144;  190.,  p.  90;  and  1909, 


'  Journal  oj  the  Royal  SUUislical  Society.  March, 


!  'i." 


.9.7.  P-  295. 


;  fell 


p 

*■        1 

1 

n 

?     I 


174 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


•I? 

t 


COMPARA".  IVE  STATEMENT  OF  PRICES  OF  CERTAIN  COMMODI- 
TIES IN  APRIL,  1918,  AND  AT  THE  CLOSE  OF  THE  THREE 
PRECEDING  MARCH  QUARTERS 

1914        1915  1916  1917  1918 

Cleveland  No.  3  pig  iron  per  ton      51/3        67/3  90/  87/6  95/ 

Steel  rails per  ton      130/         150/  217/6  aaj/  a37/6 

Coals,   best   Yorkshire   (Silkstone) 

House,  pit  head  price. per  ton      13/3        18/  18/3  19/  34/ 

Copper  (standard) per  ton      £65  £69  1/8  £116  £136!  £lloi 

Tin  (standard) per  ton      £l745/8£i7ii  £i99  £ai47/8£3«6 

Lead  (English) per  ton      £19  3/4   JE»4  ^3^  nom.  £39 

Wheat (Gazette)  31/4        54/6  53/6  81/5  73/3 

Barley (Average  25/7        31/9  53/8  71/10  56/9 

Oats (perqr.     18/8        30/6  30/5  5«/>o  5o/3 

Mutton  (prime) per  8  lbs.  7/6  8/  9/6  10/6  9/6 

Sugar  (West  India) per  cwt.     11/6        nom.  nom.  40/  44/6 

Coffee  (Santos) per  cwt.    49/9        53/6  52/ 

Tea  (common) per  lb.       5d.  9|d.  7jd.  "led.  •l9d. 

Rice per  cwt.    7/7!        12/  16/9  26/6  26/3 

Cotton  (middling) per  lb.       7.o8d.     5.48d.  783d.  I2.82d.  24.76d. 

32's  twist per  lb.       'Ud.        8ld.  12  3/8d.  17  3/8d.  42jd. 

Tallow per  cwt.    32/3        37/6  48/6  57/6  70/6 

Hemp  (Manilla) per  ton      £27  £41  £56  £96  £100 

Silk  (Canton) per  lb.       13/  11/6  17/3  17/9  34/ 

Jute per  ton      £33!        £22i  £34  ^^43  ^43 

Flax per  ton      £28!        nom.  nom.  £94  £147 

Petroleum per  7  lbs.  8d.  8id.  lid.  I4d.  19. 5d. 

Rubber  (fine  hard  Para)  per  lb.       3/  '/ii  3/oi  3/ii  3/93/4 

•  Broken  and  Fannings. 

•  The  Economist,  April  6,  19 18,  p.  564. 


GREAT   BRITAIN 


175 


I 


The  following  table  shows  the  growth  in  the  national  debt 
of  Great  Britain  during  the  war  period,  and  the  means  by 
which  the  money  has  been  obtained,  as  accurately  as  can  be 
traced  from  the  weekly  statements  of  income  and  expendi- 
ture and  other  sources  of  information:' 


Funded  debt 

Term  annuities.  .  .  . 
3l^  War  •lock 
-•1%  War  stock 
'"<  5V0  war  stock 
■•■f.  war  bonds 
i  reasury  bills .  . 
Excheq.  bonds. 
War  savings  crts, 
War  expend.  Do 

Other  debt 

American  loan .  . 
Temp,  advances 


(In  million  pounds) 

Aug. 

Mar. 

Mar. 

Mar. 

Mar. 

Apr. 

Change 

I, 

ii. 

3<. 

31. 

31, 

27, 

Since 

1914 

«9I5 

1916 

I9«7 

1918 

1918 

Aug.  I, 
1914 

586.7 

583  3 

3«8.5 

317  8 

317  8 

317  8 

-268.9 

39.6 

28.0 

36.1 

24.0 

24.0 

24.0 

-56 

349  I 

62.8 

62.7 

62.7 

62.7 

+62.7 

90C.0 

20.0 

20.0 

20.0 

+20.0 

,962.42,073.03 

,068.4+2,068.4 

614.2 

680.7 

+680.7 

15.5 

7"-a 

566.8 

463 -7 

972.6 

953  4 

+937  9 

*o  5 

67.4 

177  0 

320.3 

414  6 

414.6 

+394  I 

«  4 

74-5 

1,^6.7 

14J  9 

+  M.S  9 

23.6 

22.9 

22.9 

+  22.9 

92 

316.5 

936.9 

973  3 

+973-3 

51 -4 

51  4 

SI.4 

51-4 

+51-4 

1.0 

19.9 

217-5 

192.2 

261,7 

+260.7 

Other  cap.  liabilities 
Total  liabilities  , , 


653  31,105  02,133  13.854  45.839  05,996.8+5,343.5 
572      57.0      56.7      52.2      51.2      51 .0         -6,2 


710.51,162.02,189.83,906  65.890.26,047,8+5,337.3 
'  The  Economist,  May  4,  1918,  p.  698. 


it'    ,  i 


t»  1 


I't', 


176 


PRICES  AND   PRICE  CONTROL  DURING  THE   WAR 


^Y 


ACREAGK  UNDER  CROPS  AND  Nl'MBER  OF  LIVE  STOCK  IN  THE 
UNITED  KINGDOM,   1914-1917' 

1914           1915            1916  '1917 
Acm 

ToUl  area  (excluding  water) 76.455.39 « 

Total  acreage  under  crops  and 

grass 46,763,816  46,675,407  46,687,51*  46,208,314 

Arable  land 19,414,166  19,346.593  19.499.475  19.65a.25i 

Permanent  grass 37.349.65o  27,328,814  27,188,037  26,556,063 

Wheat 1,905.933    2,335.091    2,053,568  2.103,704 

Barley  or  here i,873.a«o    1.524.316    1.653.376  I,797.I49 

Oats 3.899.074    4.«82,296    4,171.353  4.76l,5«8 

Rye 66,890         60,040         65,971  69,399 

Beans 301,488       273,016       242.803  218,502 

Peas I69,93»       1.30,307       1 13.474  131.944 

Potatoes 1,209,150    1,214,458     1,155,404  1.365.14s 

Turnips  and  swedts 1,760,629    1,625,589    1,623,161  1,679,676 

Mangold 5«6,893        499.804       461,823  484,466 

Kote: :.■.•, :;:::::::::::::}    '''-'^s    '«««*    '«3.346  .5..450 

Vetches  or  tari-s I37.75«        "3.657       102,629  93.247 

Lucerne ■               •    •                 •    •  50,226 

Hops 36,661         34.744         31.352  16,950 

Small  fruit loi  ,083         97.438         96,250  95.777 

Clover,  sainfoin  and  grasses  under 

rotation 6,606,046    6,462,279    6,763,011  5,994.450 

Other  crops 288.673       282,104       351.459  »75  672 

Bare  fallow 348.53^       316.870       430.494  362,015 

•  The  figures  for  the  United  Kingdom  for  1917  do  not  include  the  Channel 
Islands. 
'  Journal  of  the  Royal  Statistical  Society,  January,  1918,  p.  59. 


GREAT   BRITAIV 


177 


NUMBER  OF  LIVE  STOCK  IN  THE  UNITED  KINGDOM' 

1914  1915  I9>6  1917 

Honet  used  for  agricultural  pur- 

_  P^ 1.3J67N1    i,M4"55    t.li)^.f^^   i.jaOM 

Stallioni ....*                 •                 •               .• 

Unbroken    f  One  year  and  above  3SI.794       3*0,547       346.<>6i       375.3o« 

hone*       \  Under  one  year.  .  .  172.465       167,261        KjJ.jIk)       174.S68 

„J°*a' I.851.04*     I,7II.H58     l,834.*<5     I.870.770 

Other  horses .  .  .   ■•           ....''                  <•          ...  .* 

Total  of  hones .... 

Cows  and  heifen  in  milk 1  ..         ,„ 

Cows  in  calf  but  not  in  milk ....  /  '♦.144.937    4.068.957    4.034.38a    3.998.64J 

Heifen  in  calf                     45o,l9t       4J5.793       464.'>,W       498.881 

Other      I  Two  years  and  above..  2,330,300    a,22i,2iH     2„^44,667     2,297,82s 

cattle  51,    ,*■*•"■  ^""""*'^''**<*  3.596,988    2.665,551     2.«oi,fx)H    2,747,444 

I  Under  one  year 2,662,189    2,789,933    2,No5,N54    2,762,588 

Total  of  cattle 12,184,505  12,171,452  12.451,540  12,342,268 

Ewes  kept  for  brewling 11 .255,727  1 1 ,34 1 ,904  1 1 ,603,904  1 1 .405.01 5 

Other      f  One  year  and  above  . .  5.042,321    5.397.745    5.,S7f'.5i3    5.474.331 

sheep  \  Under  one  year 11.665,929  11,536,321  ii.6(x),238  10,841.761 

Total  of  sheep 27.963,977  28,275,970  28,849,055  27.770,555 

Sows  kept  for  breeding 494.736       439.29"       4.U.464       373.096 

Other  pigs 3.457.879    3.355.841     3.181.427     2,624,561 

Total  of  pigs 3.952,615    3.355.131     3.615.891     2.998.657 

•  Stallions  are  included  in  unbroken  horses. 
^  No  figures  given  for  "Other  horses." 


ES''-       I         :R0PS  of  the   united   kingdom,    i9I4-i9I7« 

1914  1915  «9i6  1917 

vvu     .  y"-             Ofs-             0"                Qrs- 

S,                         7,804,041     9.2.19.355     7.471.884    8,040,000 

"""ey-               8.065,678    5,862,244    6,612, 5SO    7.189,000 

"*'» 20,663,537  22,3o8,.395  21,333,782  26,023,000 

"««"* 1,120,078       924,155        892.572        474.000 

"*» 374.038       300,338        261,090       278,000 

Tons  Tons  Tons  Tons 

I'otatoes..    7.476,458    7.540,240    5.468,881    8,603,000 

Turnips  and  swedes 24,195,755  24.431.083  23,318,170  24.841,000 

ivianeolds 9,522,921    9,696.192    9.009.752  10,169.000 

..Vf***;    ",?5f 4.210.924    4.526,192     5.487..369    4.7.34,ooo 

Meadow    hay 8,192,555    7,922.591     9.710,503    8,424,000 

'  Journal  of  the  Royal  Statistical  Society,  Januar>',  1918.  p.  61. 
•  Journal  of  the  Royal  Statistical  Society,  January,  1918,  p.  62. 


An 


PART  II 
THE  UNITED  STATES 


m 


Pi 


CHAPTER  I 

MoTtmtnt  of  PricM  durinf  tht  War 

Wholesale  Prices 
The  yariouB  index  numbers  of  wholesale  privOH  rnnstructwl  in 
the  United  States  all  tell  sulwtantially  the  same  sti-'v.  Gen- 
eral prices  remained  comparatively  stationary  durin^  the  first 
year  and  a  half  of  the  war  and  then  they  iK'Kan  to  advance, 
rising  to  new  heights  with  each  succeeding  month,  the  only 
exception  being  the  latter  part  of  1917,  when  the  upward 
trend  was  temporarily  chccketl  U-cause  of  governmental 
regulation.  Taking  the  most  comprehensive  of  the  index 
numbers,  that  of  the  Tnitwl  States  Bureau  of  Lalwr  Statis- 
tics, one  finds  that  price  flucti".  "ons  in  the  Inited  States 
since  1913  were  as  follows:' 

INDEX  Nt  MBKRS  OF  WHOLESALE  PRICES.  BV  (IROfPS  OK  ( OM- 
MODITIES  AND  BV  YEARS.  1913  To  1916.  AM)  BV  VEARS   ' 
AND  MONTHS.   1917  AND   1918 
(1913-iooj 

I  J  s      i    3    I 

Vearand  .Month  |        §     If   if    -±    ^1    iJ    ^1     |        I 

■2     i2   C-^  I-"  ^.^  J«  I-   |.5   g     ^ 

Average  for  1913 loo  loo  loii  loo  loo  loo  loo  loo  loo  loo 

Average  for  1914  103  10.1  98  9*  »-  97  103  103  97  9., 

Average  for  1915 105  104  i,k,  «;  97  94  ,,^  ,„f  Jj-  ,^ 

Average  for  1916  I2j  126  127  II5  14s  loi  143  no  Uo  ia» 

Average  lor  1917 188  177  181  ib>,  jo8  1^4  I8j  15^  153  17^ 

I?"""fy M7  "SO  lf>l  170  tx.%  106  144  UK  10  ,«j 

If^fuary 150  iho  i6j  178  190  108  ll  1J9  i  .« 

^'^T" "fta  161  163  181  199  11:  I,,  139  14  ■  160 

^P'" «8o  I8j  169  178  i08  114  ,  151  ix.  ,7, 

f^*y '96  191  173  l«7  217  117  164  151  I4«  181 

•I""* '96  187  179  193  239  IJ7  ,65  ,6j  15,  ,84 

J."'y '98  '80  187  183  J57  l.V  I85  165  151  185 

^P'P",^"^ ^°i     '78     :93     155    3J8     134    203     165     155     I8» 

October^ 207     183     194     ,4j     ,8,     ,34    j^,     ,5^     ,g^     ,80 

^"^"•^f; '"     '?4    W2     '51     173     M5    J.V     175     165     182 

'^""'*' 204     185    206     153     173     135    230     175     166     t8i 

'  Monthly  Jietirw  of  the  Bureau  of  Labor  Slalistics,  Februar>-.  1918,  p.  16;  March, 
*9'9»  P»  115* 

181 


j|Wl 


I  ■; 


s\ 


I 


Ito  PRICES  AND   PRICE  CONTROL  DURING    THE  WAR 

INDEX  NUMBERS  OF  WHOLESALE  PRICES— Co»iK««*'< 
1918 

January aoj  188  209  169  173  136  ai6  188  178  i8j 

February 307  186  ai3  171  175  137  117  188  i8t  187 

March an  178  220  171  175  143  ?iy  188  184  187 

April 217  179  230  170  176  145  214  188  193  191 

May 212  178  234  172  177  147  209  188  197  191 

June 214  179  243  171  177  148  205  192  199  193 

July 221  185  249  178  183  153  202  192  192  198 

August 229  191  251  178  183  156  207  227  191  202 

September 236  199  251  179  183  15a  206  233  195  207 

October 223  199  253  179  186  157  204  233  197  204 

November 219  203  253  182  186  163  201  233  207  206 

December 221  207  246  183  183  163  182  233  204  206 

An  analysis  of  the  figures  shows  that  prices  in  1918  were  almost 
double  those  in  1913 ;  the  highest  level  was  reached  in  Septem- 
ber, 1918,  when  the  index  number  stood  at  207;  it  declined  to 
204  in  October,  but  rose  again  to  206  during  the  next  month. 
Taking  commodities  by  groups  into  which  they  are  classified 
by  the  Bureau  of  Labor  Statistics,  one  finds  that  the  average 
index  numbers  increased  from  1913  to  November,  1918,  in 
the  case  of  farm  products  119  f>er  cent;  food,  etc.,  103  per 
cent;  cloths  and  clothing  153  per  cent;  metals  and  metal  prod- 
ucts 86  per  cent;  lumber  and  building  materials  63  per  cent; 
chemicals  and  drugs  loi  per  cent;  house  furnishing  goods  133 
per  cent ;  miscellaneous  group  (including  such  articles  as  cot- 
tonseed meal  and  oil,  newsprint  and  wrapping  paper,  rubber, 
tobacco,  whiskey  and  wood  pulp)  107  per  cent. 

An  interesting  and  suggestivf*  table  of  index  numbers  is 
contained  in  the  Federal  Reserve  Bulletin  for  October,  1918. 
Tne  numbers  were  constructed  according  to  the  method 
adopted  by  the  Bureau  of  Labor  Statistics,  but  with  a  different 
grouping  of  the  commodities  included.  The  grouping  chosen 
comprises  (i)  raw  materials,  including  subgroups  of  farm,  an- 
imal, forest  and  mineral  products;  (2)  producers'  goods,  such 
as  '^teel  rails,  copper  wire  and  cotton  yarn,  and  (3)  consumers' 
goods,  such  as  flour,  beef  and  cotton  textiles.  The  classifica- 
tion was  made  as  far  as  possible  in  accordance  with  the  prin- 
cipal use  of  the  commodity,  since  certain  articles  are  used 
both  by  producers  and  consumers  and  since  it  is  often  difficult 
to  distinguish  between  raw  materials  and  producers'  goods.' 

'  Monthly  Labor  Review,  December,  1918,  p.  147. 


THE    UNITED   STATES  jg. 

The  movement  of  wholesale  prices  in  the  United  States  since 
1914.  accordmg  to  this  tabulation  was: 

Average  for  i9I3»ioo 

Raw  Materials  f     5  c 

I    II 
Year  and  Month  S         ^S  2  "  '«  C  i^ni 

J  ^1  -I  s=  ^  s«  i"  ii!== 
II  II  ^1  h  n'«  II  11  5s|| 
■2'     -l"^      ^"^      s^    (S-s    |J      ij      =«^| 

Average  for  1914 ,03       ,04        y;        90        99        ,„       ,0,       '      , 

Averanefor  191.S ,,,        100         91         ^        X^       ,/•;         "i  ,'^> 

Av.raKefor.9.6 ,.8   „9    ^   ,!'   ,?2   j;"^   |-    ;- 

Average  for  year 2,0   ,69   118   .79   ,-,   ,8-   ,,,    ,-, 

tea^ry...  ....•;•■■   .'t^   .'^^   .^  k       If   '£'   '^^    '^° 

Cf"' '98    163    105    189    ,69    181     1-2  -? 

^IZ "5   '^   '°»   '96   .to    89    79    8 

r"* 227   166   120   20s   I8s   igg    -N     8 

Ju'y 2.10    168    126    198     87    2u     -^     ,ti 

November «i       '2^       "'       '5°       '"«       '«S       '«■         '^ 

,c,,8  •'''        ■'*       '^9       .58       178        180       .85         i8i 

fc7;y. •...•..• 1^2   Hi   I'?   '"'    ;«-'    •«'    -92    .85 

»,,„(,    ■'       ^42        •7"        .31        .72        .84        184        iqi  187 

AprM    lit       'J"       '■«       '-'       '«7       .87       .89  87 

i,,„„  "°     201      .38      173     i8(,     m2     ,„,       , 

]"r; II',        '98        U8        .71        .89        ,94        .97  9^ 

i"'I,,t *-'J   209    140   180   ,96    196   202    .98 

^"8"'* '46   215    143    .80   200    199   205    203 

The  rise  in  wholesale  prices  of  individual  commodities  from 
July,  1914,  to  July,  1918,  was:' 

WHOLESALE  PRICES  IN  JULY.   ,9.4,   ,9.5.   .9.6,   ,9.7  AND   .9.8,  AS 
COMPARED   WITH   AVERAC.E   PRICES   IN    .9,3 

(AcTLAL  Money  Prices) 

Article  Unit  J"'^' 

FOODSTUFFS  '^'-^       '^'^       '^'5      '9'6       1917        .9.8 

(0)  ^nimu/ 
Cattle.       good       to 

Beefr'fresr  good''"  ""•  ^'  '"'  ^  ^'^  -^"'■'  -^  9«5  «.2.56o  $.7,625 

native  steers Lb.  no         1,5         ,,,         ...           ., 

Beef,  salt,  extra  mess  Bbl  ,8  .9'3  .7  .^50  .7.5^  .8  Ito     ,0  yxt     ,4  8^",' 

^°«'-^'^'y 100  lbs.  8.365     8.769     728,     9.825     .5  4fe    ■}7;7i^ 

'  Monthly  Labor  Review,  September,  1918,  pp.  102-103. 

13 


m 


:Mr' 


1 84 


PRICES  AND   PRICE   CONTROL   DURING  THE  WAR 


WHOLESALE  PRICES  IN  JULY,  1914-18— C<>n«i«tt#i 

short    clear 

.187       .141  .III       .157 

.166       .177  .161       .190 


Bacon, 

sides Lb. 

Hams,  smoked,  loose  Lb. 

Lard,  prime,  con- 
tract   Lb. 

Pork,  salt,  mess Bbl. 

Sheep,  ewes too  lbs. 

Mutton,  dressed  .  .  .Lb. 

Butter,  creamery 
extra Lb. 

Eggs,  fresh,  firsts.  .  .Doz. 

Milk Qt. 

(6)   VegetabU 

Wheat,  No.  1  north- 
em  Bush. 

Wheat  flour,  stand- 
ard patent Bbl. 

Corn,  No.  2,  mixed.  Bush. 

Corn  meal 100  lbs. 

Oats,  standard,  in 
store Bush. 

Rye,  No.  2 Bush. 

Rye  flour,  pure,  me- 
dium straight ....  Bbl. 

Barley,  fair  to  good, 
malting Bush. 

Rice,  Honduras, 
head Lb. 

Potatoes,  white.  .  .  .  Bush. 

Sugar,  granulated  .  .  Lb. 

TEXTILES  AND 
LEATHER  GOODS 

Cotton,  upland,  mid- 
dling   Lb. 

Cotton  yam,  carded, 
lo/i Lb. 

Sheeting,  brown, 
Pepperell Yd. 

Bleached  muslin, 
Lonsdale Yd. 

Wool,  I  /4  and  3/8  grades, 
scoured Lb. 

Worsted  yarn,  2/32's  Lb. 

Clay  worsted  suit- 
ings, l6-oz Yd. 

Storm  serge,  all- 
wool,  50-in Yd. 

Hides,  packers', 

heavy  native  steers  Lb. 

Leather,  chrome  calf  Sq.  ft. 

Leather,  sole,  oak  . .  Lb. 

Shoes,  men's,  Good- 
year welt,  vici  calf, 
blucher Pair 

Shoes,  women's, 
Goodyear  welt, 
gun  metal,  button  Pair 


.248 
.240 


.110   .102   .081   .131 

22.471  23.625  18.500  27.167 

4687  4  538  5469  6.545 


. 103    095 


.109   .131 


.310 
.226 

•035 


.270 
.187 
.030 


.261 
.169 
.030 


.276 
."3 
.031 


.201 

42.250 

8.600 

•145 

■  376 
.318 
.050 


.276 
•303 

.264 
48.500 

10  97.5 
.205 

•  432 
374 
•054 


.874   .897  1.390  I. 170   2.582   2.247 


4  584 

.625 

1-599 

376 
.636 

3  "3 

.625 

051 
.614 
•  043 


.128 
.221 

073 
.082 

■471 
•777 

I  382 

.563 

.184 
.270 
449 


4  594 

.710 

1.780 

369 
.618 

2  975 

533 

054 

1 .206 

.042 


131 
215 
.070 
.085 

444 
.650 

1.328 

■505 

"94 

■275 
•475 


7  031 

•783 

I  750 

529 
1.036 

5  388 

743 

.049 

•444 
.058 


092 

160 

060 

075 

557 
850 

508 

539 

258 
280 

495 


3  "3  3  150  3 


2.175  2.260  2 


6.100 

.808 

1.982 

•  405 
.966 

5  150 
.746 

•045 
.863 

•075 


•130 

•253 

.078 

.088 

.686 
1 .100 

2.000 

.760 

.270 
.460 
•635 


12.750 
2.044 
4.880 

.764 

2.226 
11.620 

I  391 

.070 

2.375 

075 


.261 

•450 

.140 

.160 

I  .200 
I  .600 

3  250 

1. 176 

330 
540 
815 


250  3  750   4  750 


350  2.750   3.500 


10.702 
1.665 

4-825 

765 
I  705 

9  425 

I -125 

.094 

I  035 

.074 


312 
640 

250 

437 
150 

450 
470 

330 
640 
830 

500 

500 


THE   UNITED  STATES 


WHOLESALE    'RICES  IN  JULY.   i9U-iS-Conti„ued 


MINERAL   AND 
METAL    PRODUCTS 

Coal,        anthracite, 

chestnut 2240  lbs. 

Coal,       bituminous, 

run  of  mine 2000  lbs. 

Coke,  furnace, 

prompt 2000  lbs. 

Copper,  electrolytic  Lb. 
Copper    wire,    bare, 

.No.  8 Lb. 

Pig  iron,  Bessemer  .  2240  lbs. 

Steel  billets 2240  lbs. 

Tin  plate,  domestic 

coke 100  lbs. 

Pig  tin Lb. 

Pig  lead Lb. 

Spelter Lb. 

Petroleum,  crude. .  .Bbl. 
Petroleum,    refined, 

water-white Gal. 

Gasoline,  motor.  . .  .Gal. 


5  313    5 
2 . 200    2 

2  538      2 
167 

•7  i.W  >4 
25.789  19 

3  558    3 
449 

.044 
.058 
2.450     I 

•123 
.168 


»4i     5 
.200    2 

.000     I 
134 

148 

900  14 
000  21 . 

350 
311 
039 

O.M 

750 

.120 
.140 


*""    5-507  5  9.13 

200    2  200  5  000 

7,S"   2.750  15  CKK) 

199    265  ,18 

210    .^25  3,8 

9,So  21  950  57.450 

380  41 .000  100.000 


175 
•391 
058 
.220 
350 

.120 
.120 


5  875 
389 
.069 

2.600 

.120 
.240 


12.000 
.620 
114 
093 

3  100 

.120 
240 


185 


693 

750 

000 
^54 

285 
600 
500 


750 
930 
080 
088 
000 

171 
241 


It  may  be  seen  from  the  table  that  a  great  many  commodi- 
ties more  than  doubled  in  price.     Conspicuous  examples  are 
wheat,  wheat  flour,  corn  and  corn  meal,  oats,  rye,  cattle  hogs 
bacon   lard,  pork,  cotton  and  cotton  yarn,  wool  and  worsted 
yarn,  leather,  coke  and  pig  iron. 

In  October,  1918,  a  number  of  commodities  averaged  less 
than  in  July  of  the  same  year.'  A  decided  drop  in  price  took 
place  in  the  case  of  barley,  corn  and  corn  meal,  rye  flour 
sheep,  mutton  and  salt  pork.  Smaller  decreases  were  shown 
for  rye,  wheat  flour,  potatoes,  hides  and  leather,  cotton  yarn 
and  pig  tin. 

On  the  other  hand,  increases  between  July  and  October 
took  place  in  the  prices  of  bacon,  ham,  butter,  eggs,  milk 
white  cotton,  hogs,  cattle,  fresh  beef,  wheat,  sugar,  shoes' 
copper  pig  lead  and  spelter.  For  wool,  coal,  coke,  pig  iron' 
steel  billets,  tin  plate,  crude  and  refined  petroleum  and  gaso- 
line the  price  in  Octcbc  was  practically  the  same  as  in  July 

Very  valuable  records  of  the  movement  of  wholesale  prices 
have  been  gathered  by  the  Price  Section  of  the  Division  of 
Planning  and  Statistics  of  the  War  Industries  Board.     The 

'  Monthly  Labor  Review,  December,  1918,  p.  no. 


IQ. 


186 


PRICES  AND   PRICE   CONTROL   DtTRING  THE   WAR 


grouping  of  commodities  made  by  the  board  is  somewhat 
different  from  that  of  the  Bureau  of  Labor  or  of  the  Federal 
Reserve  Board;  the  commodities  are  classified  under  seven 
major  groups — food;  clothing;  rubber,  paper,  and  fiber; 
metals;  building  materials;  fuel,  and  chemicals.  The  quota- 
tions recorded  by  the  Price  Section  are  averages  of  prices 
taken  at  monthly  or  weekly  intervals  from  the  leading  trade 
journals,  from  go\ernment  bureaus,  particularly  the  Bureau 
of  Labor  Statistics,  and  from  private  sources.  In  order  to 
make  possible  a  comparison  of  price  fluctuations  of  different 
commodities  during  the  war,  relative  prices  on  a  fixed  base 
have  been  figured  to  correspond  to  each  actual  quotation. 
These  relative  prices  were  made  to  represent  the  percentages 
of  rise  or  fall  of  the  actual  prices  from  the  level  for  the  year 
immediately  preceding  the  outbreak  of  the  European  war 
(July  I,  1913,  to  June  30,  1914). 

The  first  bulletin  containing  monthly  quotations  and  aver- 
age prices  was  issued  by  the  War  Industries  Board  in  October, 
1918;  it  considers  88  commodities. 

Data  showing  the  effect  of  governmental  price  fixing  upon 
the  trend  of  wholesale  prices  are  contained  in  a  bulletin  "  Fluc- 
tuations of  Controlled  and  Uncontrolled  Prices,"  which  the 
War  Industries  Board  issued  in  December,  1918.  As  pointed 
out  in  this  bulletin,  a  comparison  could  be  made  much  more 
easily  if  all  of  the  controlled  commodities  had  been  brought 
under  regulation  at  the  beginning  of  the  price  fixing  f)eriod, 
for  then  the  list  of  controlled  commodities  would  have  re- 
mained constant  and  furnished  a  definite  basis  for  construct- 
ing an  index  number  to  measure  the  price  changes.  The  fact 
that  price  control  was  extended  gradually  made  it  necessary 
to  resort  to  two  methods  of  comparison.  The  first  method 
uses  an  index  number  based  on  the  list  of  controlled  commodi- 
ties as  it  stood  in  September,  1918,  and  compares  the  relative 
movement  of  controlled  and  uncontrolled  prices  from  August, 
1916,  to  that  date.  It  necessarily  treats  some  commodities 
as  controlled  before  they  were  actually  under  control.  In 
the  second  method  the  prices  of  commodities  under  control 


THE   CMTED   STATES 


187 


in  any  given  month  are  compared  with  the  prices  of  the  same 
commodities  n  the  previous  month  and  the  percentage  of 
change  .s  md.cated.     This  month  to  month  comparison  per 

prlc^fixbg""'  '"'"""'•"'^^  ^"  '^  "^^'P^  ^^-^'>-  •"  ^-e  '-'h 

In  the  following  table  the  index  number  of  controlled  prices 

.s  constructed  from  the  prices  of  78  commodities  which  by 

September.  ,918.  had  come  under  control.     The  index  number 

s?n;nH       ^^^^^^"^^  ^^^  commodities  used  are  those  repre- 
vSesirPHcesr"  "^  '^"^"^  ''''''''-  ^"^^  ^-^- «^ 


1916 

Aug. 

Sept. 

Oct. 

N»v. 

Dec. 

Jan. 
Feb. 
Mar 
.Apri 
May 
June 
July 


INDEX   NUMBERS  OF 
Average  Prices  Alcust, 
Controlled  Uncontrolled  Total 
Prices  Prices 


ALL  CO.M.MODITIES 
1916-jLLV,  1917=100 

Controlled  Uncontrolled 


.:h 


74 
77 
83 
91 
96 

98 
99 
•03 
III 
112 
'23 
"3 


83 
86 
88 
93 
93 

96 
loi 

103 
110 

"3 
116 

"7 


79 
82 
86 
92 
94 

9; 
100 

103 
III 
"7 
119 
119 


1917 

Aug. 

Sept. 

Oct. 

Nov. 

Dec. 

1918 

Jan. 

Feb. 

March 

April 

Afay 

June 

July 

Aug. 

Sept. 


Prices 

119 
III 

'03 
104 
104 

106 
107 
107 
108 
109 
109 
III 
no 

112 


Prices 

118 
121 
'25 
127 
126 

128 
129 
129 
133 
I.?3 
I3.i 
140 

145 
',Si 


Total 


119 

'17 
116 

"7 
116 

119 
119 
120 
122 
122 
'23 

128 

130 

'34 


The  next  table  shows  the  extent  to  which  price  fixing  had 
progressed  m  the  several  groups  of  commoditi."  in  September 
19  8,  the  relative  importance  of  the  controlled  and  uncon- 

in  exchrn^eT  '"'"'  "^"""^  '^  *'^^'^  ""^^'"^^'^  -'"- 

i  lm':tT'""  '^"'''  '"'"''"'''""'  "f  Controlled  and  Uncontrolled  Pncc.,  p.  8. 


^v^mK 


m 


w 


4 


lisii 


'if 


iillS 


i:iU; 

■I ;  life 


l88  PRICES  AND   PRirE   CONTROL   DURINC.  THE    WAR 

EXTENT  OF   PRICE   FIXING   IN   SEPTEMBER,    1918 

Number  of  Relative 

Group  Commodities  ^  Importance 

Con-      Uncon-        Con-  Uncon- 

trolle<t     trolled       trolled         trolled 

All  Commodities 7*  «93  39  7%  ^*  ■i^%' 

Group  I— Farm  Products 8  22  18.04%  8«-96% 

Group  1 1— Food,  etc 10  77  »*  "Z"  7178% 

Group  11 1— Cloths  and  ClothinK 18  34  4«  35%  5*^5% 

Group  IV— Fuel  and  Lighting 8  6  63 .44%  36  56% 

GroupV— Metals  and  Metal  Products.  19  6  83.33%  16.1770 

Group  VI — Lumber  and  Building  Mate-  „  _ 

riaU 9  21  55-7i2r  44»9% 

Group  VII— Drugs  and  Chemicals  ....  a  7  7  95%  9*  05% 

Group  VIII— House-lumishing  Goods  .  o  5  ..  '9°  ^'Z" 

Group  IX— Miscellaneous 4  >5  I7  40%  8a  .60% 

The  average  prices  of  commodities  by  groups  rose  by  Sep- 
tember, 1918,  as  follows: 

INDEX  NUMBERS,  SEPTEMBER,    1918 
Average  Prices  August,  i9ifr-JuLY,  1917-100 

Controlled     Uncontrolled    Total  for 
Group  Prices  Prices  Group 

All  Commodities na  I5«  »34 

(;roup  I— Farm  Products 107  168  15a 

Group  II— Foods 112  13'  "5 

Group  III— Cloths  and  Clothing 165  147  «54 

Group  IV— Fuels  and  Lighting 99  '38  "O 

Group  V— Metals  and  Metal  Products.  9a  130  9° 
Group  VI — Lumbtr  and  Building  Mate- 
rials   13a  «59  «43 

Group  VII — Drugs  and  Chemicals .  .  ..  94  152  '45 

Group  VIII — House-furnishing  Goo^ls  .  o  145  '45 

Group  IX— Miscellaneous '3'  '^9  '4* 

Retail  Prices 

Reports  of  retail  prices  of  food  collected  by  the  Bureau  of 
Labor  Statistics  for  June  15,  1914,  and  for  subsequent  dates, 
show  the  movement  of  th  jse  prices  as  affected  by  the  war. ' 
As  the  table  opposit..  indicates,  the  price  of  food  as  a  whole  in 
June,  1915,  was  not  higher  t!  an  in  June,  1914;  the  increase 
over  June,  1913,  was  2  per  cent;  m  June,  1916,  the  price  was 
13  per  cent  higher  than  in  June,  1914.  The  greatest  advance 
took  place  during  the  latter  part  of  1916  and  the  early  months 
of  1917.  The  result  of  this  was  an  increase  in  June,  1917, 
of  55  per  cent  over  the  June,  1914,  price;  an  additional  rise  of 

'  Monthly  Labor  Review,  August,  1918,  p.  115. 


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i  I 


IM 


190  PRICES  AND  PmCE  CONTROL  DURING  THE  WAR 

73  per  cent  occurretl  from  *une,  191 7,  to  June,  1918,  bringing 
the  total  up  to  66  per  cent.  In  November,  1918,  a  few  days 
after  the  conclusion  of  the  arr  ti^e,  the  prices  of  all  articles 
of  food  combined  were  75  per  cent  higher  than  in  Novemlwr, 
1913.'  If  one  considers  the  rise  of  individual  commodities, 
one  finds  that  in  the  five  year  period  from  June,  1913,  to  J 'me, 
1018,  Iamb  increased  93  per  cent,  lard  106  per  cent,  and  corn 
meal  139  per  cent.  The  increase  for  Hour  was  145  per  cent 
in  1917,  and  103  per  cent  in  1918;  however,  the  fluctuation 
in  the  price  of  flour  was  not  as  great  as  in  the  case  of. potatoes, 
which  showed  an  increase  of  256  per  cent  in  June,  191 7,  and 
only  61  per  cent  in  June,  1918.  The  rise  in  the  price  of  meats 
varied  from  65  per  cent  for  sirloin  steak  to  82  per  cent  for 
round  steak  and  87  per  cent  for  bacon.  Sugar  rose  72  per 
cent,  bread  74  per  cent,  eggs  55  per  cent,  butter  45  per  cent, 
and  milk  44  per  cent. 

To  enable  the  reader  to  follow  the  percentage  changes  in 
*  prices  more  readily,  the  money  prices  of  16  articles  of  foo<l 
have  been  reduced  by  the  Bureau  of  Labor  Statistics  to  rela- 
tive prices,  the  price  of  each  article  having  been  weighted 
according  to  the  quantity  consumed  in  the  average  working 
man's  family.  The  relative  figures  are  based  on  the  average 
price  for  the  year  191 3.' 

RELATIVE   RETAIL   PRICES  OF  FOOD  ON  JUNE   15,  1913-1918 

Article  Unit       1913     1914     1915     1916  1917  1918 

Sirloin  steak Pound  102       lo^       103      113  129  168 

Round  steak "  101       106       105      117  135  i8j 

Rib  roast "  102      103       103      113  132  169 

Pork  chops "                 99      ,03        98      no  148  177 

{*acon "  loi       100        99      107  158  191 

;'3"J "  102       100        97       119  145  170 

t-.^™ '■  «oo   97    95   130  177  208 

"«"* ^  «03   103    98   114  136  177 

Eggs Dozen  .. 

?""" Pound  92  88  90  95  123  133 

S*""; Quart  99  100  9^  99  119  146 

oread 16-oz.  loaf     100  no  126  124  170  174 

e}ouT Pound  101  99  130  117  246  203 

Cornmeal "  98  103  109  108  182  223 

P°<a»°es "  104  132  99  167  366  171 

Sugar "  97  93  126  158  170  165 

All  articles  combined 98        99       100      113       152       162 

'  Monthly  Labor  Review,  January,  1919,  p.  89. 
'  Ibid.,  August,  1918,  p.  116. 


THE   UNITED  STATES 


191 


Retail  prices  vary  considerably  between  different  cities 
and  It  IS  almost  impossible  to  arrive  at  any  fair  comparison 
of  prices  between  such  places,  for  instance,  as  New  Nork  and 
Denver,  or  Chicago  and  San  Francisco.  Qualities  and  market 
conditions  vary,  and  the  grades  differ  not  only  from  city  to 
city  but  also  from  store  to  store  within  the  same  city  and 
often  from  month  to  month  within  the  same  store  '  This  is 
true  not  only  of  food  prtxlucts  but  also  of  other  comnuHlities 
oneretl  for  sale. 

A  very  pronounced  increase  in  retail  prices  of  dry  goods  in 
different  cities  took  place  between  October  15.  1917  and 
October  1.5.  1918.  A  table  prepare<l  by  the  Bur'eau  of  Lal>or 
Statistics  gives  the  average  retail  prices  of  ten  dry  gocxls  on 
these  two  dates.  It  shows  that  the  price  of  calico  rose  from 
13.9  cents  to  26.4  cents  in  N'ew  V«,rk;  from  10.8  cents  to  25 
cents  in  Atlanta;  from  13  cents  to  35  cents  in  Baltimore;  from 
14.2  cents  to  20.4  cents  in  Salt  Lake  City,  etc.;  the  price  of 
percale  advanced  from  20.8  cents  to  42.4  cents  in  New  ^ork- 
from  24.3  cents  to  40  cents  in  Atlanta;  from  23  cents  to  40  9 
cents  in  Baltimore,  and  from  23.8  cents  to  42.4  cents  in  Salt 
Lake  City.« 

Information  secured  by  the  National  Industrial  Conference 
Board  from  112  stores  in  46  cities  throughout  the  country 
indicated  that  average  prices  of  common  articles  of  wearing 
apparel  had  advanced  since  July.  1914,  to  November.  1918. 
an  the  way  from  64  per  cent  in  the  case  of  women's  blouses  to 
1857  per  cent  in  the  case  of  men's  overalls.'  Men's  and 
women's  coats  which  were  selling  for  $10  i„  1914  cost  from  $19 
to?20in  November.  1918.  Pricesof  knit  underwear  advanced 
nearly  130  ,>er  cent.  There  was  an  incr-ase  of  68  per  cent 
in  the  price  of  men's  shoes  and  of  90.5  per  cent  in  that  of 
women's  shoes.  Men's  shirts  which  cost  $1  in  1914  were  sell- 
ing at  $1.80  in  November.  1918;  the  price  of  women's  aprons 

lu""',uy?"J"'^f'.'''^'''''''"'>fLaborSlatislics.Ft-bTuarY   iq,8   n   i 
retafS  o'rfe^Sn^4Td.tT  ""«'  '"'■  ""-'"^-     ^^" -'-' 'abils  ,ivin« 
J-nuStriiJ^Ts:"'"""'  ''■°^'  °'  ^"'"^  Supplement.  December  30,  .918- 


Iff 
'■ll 


««• 


PRICES  AND   PRICE  CONTROL   DL'RINCi  THE   WAR 


rose  during  the  same  period  from  30  cents  to  95  cents,  the 
price  of  woolen  skirts  from  $2.00  to  $4.(X),  of  house  dresses 
from  $1  to  $1.90. 

Furnishings,  especially  household  linens,  draperies  and 
other  fabrics  often  advanced  in  price  100  {wr  cent  or  more. 
Large  increases  occurred  also  in  the  price  of  kitchen  utensils 
and  furniture.  The  advance  in  the  cost  of  tobacco  has  l)een 
placed  by  well  known  retailers  at  •jo  per  cent  to  40  per  cent.' 

Prices  of  coal  secured  by  the  Board  in  38  cities  and  by  the 
I'nited  States  Fuel  Administration  in  21  States  indicate<l  that 
the  average  price  of  anthracite  when  lx)Ught  in  ton  lots  for 
household  use  had  risen  almut  45  per  cent  between  July,  1914, 
and  November,  1918.  The  average  increase  in  the  price  of 
bituminous  coal  for  household  use  was  atxiut  60  per  cent. 
This  comparison  df)es  not  show  the  exact  situation,  since  the 
summer  price  of  coal  is  usually  slightly  lower  than  the  winter 
price ;  the  true  advance  within  the  war  period  is  somewhat  less 
than  the  figures  indicate. 

.According  to  the  data  gathered  by  the  Bureau  of  Labor 
Statistics,  the  average  and  relative  retail  prices  of  coal  in  ton 
lots  for  household  use  increased  January  15,  1913,  to  January 
15.  1919.  as  follows:' 


AVER.^GE  .AND  RELATIVE  RETAIL  PRICES  OF  COAL  IN  TON  LOTS, 

FOR   HO'  SEHOLD   USE 

Janl'arv  15  OF  Each  Year  1913  to  1919,  Inclusivb 

[Average  orice  foi  year  I9I3»I00.] 

Pensitylvania  Anthracite,  White 

Aih  Bituminoui 

Stove  Chestnut 

Average  Relative  Average  Relative  Average  Relative 


Period 


Average 
"an.  15, 
an.  15, 
an.  15, 
an.  15, 
an.  15, 
an.  15, 
an.  15, 


for  year,  1913. 

1913 

1914 

•915 

1916 

1917 

1918 

I9'9 


Pric 

$7-73 
7-99 
7.80 
7-83 
7  9.^ 
9.29 
9.88 

II  5a 


Price 
100 
103 
101 
101 
103 

130 
128 
149 


Price 

$7  91 
8.15 
8.00 

7  99 

8  13 
9.40 

10.03 
II  .61 


Price 
100 
103 

lOI 
lOI 

103 
119 
127 
147 


Price 

$5  41 
.S  48 
5  97 
5  71 
5  69 
6.96 
7.68 
7.90 


Price 
100 
loi 
no 
106 

'05 
139 
144 
146 


•  Industrial  News  Survey,  Cost  of  Living  Supplement,  December  30,1918-Jan. 
uary  6,  1919,  p.  7. 
'  Monlhiy  Labor  Review,  March,  1919,  p.  loi. 


TIIK    r\ITKO   stTATI 


•9i 


As  may  Im*  nottfl  in  the  tal)le  the  firnt  biKarivance  in  the  price 
of  ail  Icimis  of  coal  came  during  the  |H>iiod  from  January  15, 
1917.  to  January  15,  1918.  From  January  15,  1918,  to  Janu- 
^T  '5.  >9'9.  the  average  price  of  bituminous  coal  rose  hut 
slightly,  from  S7.68  to  S7.90;  the  price  of  anthracite  during  the 
same  time  advanced  for  stove  size,  from  $9.88  to  §11.52,  and 
for  chestnut  from  $10.0.^  to  $11.61. 

From  data  furnished  ^y  chamlnTs  of  commerce,  real  estate 
l)oards  and  brokers,  and  charitable  and  civic  organizations 
in  nearly  100  cities,  the  Industrial  Conference  Board  came  to 
the  conclusion  that  rent  rose  throughout  the  country  approxi- 
mately 20  per  cent.  There  were  marked  IcKal  variations  in 
rent  changes. 


i  fit  1 


i  :'i  1 

Mi' 


4  -   I ' 


CHAPTER  n 
Wtf  M  tad  Cost  of  LiTiag 

VV'AfiES 

There  are  in  the  Tnitet!  States  no  comprehensive  wage 
BtatiHtirn  for  the  entire  country  comparable  with  the  price 
statiHtics  of  the  Bureau  of  LatK.r.     The  meaRcr  evidence 
which  18  available  shows  that  wage  achances  since  the  begin- 
mnR  of  the  war  have  l.een  very  uneven,  varying  according  to 
districts  and  occupations  and  fluctuating  from  6  per  cent  for 
daytime  newspaper  compositors  and  linotyix'  operators    to 
105  per  cent  for  blacksmiths  (shipyards.  Delaware  River)  ' 
W  hile  advances  from  40  to  75  per  cent  have  l)een  common  in 
such  types  of  labor  as  metal  workers  and  workers  in  textile 
mills  and  shoe  factories,  many  classes  of  lalK)rers,  as,  for 
mstance,  bakers,  bricklayers,  motormen  and  conductors  on 
street  railways,  have  received  increases  not  in  excess  of  10 
to  io  per  cent.    The  above  data  were  secured  bv  Messrs.  Hugh 
S    Hanna  and  W.  Sett  Lauck  from  records  and  reports  of 
federal  and  State  departments,  and  from  trade  and  lalxjr 
publications.     In  an  interesting  study  on  "Wages  and  the 
\\ar"  they  brought  out  the  facts  that  from  the  beginning  of 
the  war  to  the  close  of  1917.  "there  has  been  absolutely  no 
titi'formity  in  the  degree  of  increase"  in  rates  of  labor  com- 
pen.ation.  and  that  "the  great  advances  had  taken  place  in 
those  lines  of  industry  for  the  prmlucts  of  which  the  war  had 
created  a  spt.iai  demand."'     Many  individual  workers,  of 
course,  profited  by  transferring  themselves  to  those  industries 
where  the  demand  for  labor    as  great  and  where  an  important 

^American  Economic  Association.  Report  of  theComnitrpo  nn  Wnr  Fin,..™ 
PP.-  .35-'/?.=  '"^  ''''""'"  "^"^  "^ '**  ^'"""'  ?^^^^"^'.°"  March,"?9?l: 

'Hugh  S.  Hanna  an.l  W.  Sett  Uuck:  Wages  and  the  W,ir-  A  Summ,ir„  rt 
Recent  Wage  Motements,  Monthly  Ubor  Rn-ie^M^r^,"  Summo-y  r* 

194 


TIIK   IMTKH  HT.\TK-»  „,, 

advance  in  «•««.;«  u.,k  „l  re.    An  i,|..a  a.  to  what  wtro  the 
chanKc,  ,n  rdat.vo  wagcH  an.l  ..arnin«H  In  l).ct.mlH.r.  ,.>,7 

tlhlcT                   ""■*""  "'"'■  '"  '^''*'""*'  ^'""'  "'"  ^'•"••«'"K 

RKI.ATIVK  WAOKS  IN  lEADINC.   OCCUPATIONS.  DECFMBKR    ,.„, 
(OMPARKl)  WITH    ,9,4-,,         •='^'-^"'^«.  ""7. 
1414-IA-.100 

•917  ('<im. 

lrcSrrfiI.&r  "•-*'•••""  ""••"•«"• '•'>■' '%t;" 

jlfxl  <arri«T.  f|>lii«frr  IrmlinK)                     " ' 

I  liimlKri.  and  ua»  fitt.-r,  (hiiil.linK  trathw) '  " 

SlriHturat-iron  worki-m  (l.tiilHinK  tra.lm)    "•' 

SjMin  fittrr.  (l>uil<linK  ira<l.-ii)                     •  •.» 

Motormrn  and  rnndiirtoni  (.ircrf  railwavi) "■♦ 

Shwe-mffal  worker,  (buibling  trade*)           "S 

Mining  fanthrariep)                                 1 16 

Intlfjc  wiremrn  (liiiildinK  tradf.) '"* 

Black.mith.  (rallroa.l  »h<.|».  noutheaMern) "" 

Boiler  maker,  (railnwd  nhofi.,  noiitheastem) '*•' 

I-onKuhoremcn  (New  York)                               1*4 

Marhinisn  (navy  yard,  Philadelphia) ''.^ 

Marhinmt.  (railroad  .hop.,  wuthea.lern) '"' 

Pick  mininK,  bituminou.  (JlwkinK  \alfey  di.triit ) '"' 

Ship  ,n,i.....  (navy  yar.l.  Phila.lelphia)     ^              ' '1" 

Ship  finer,    navy  yard.  Philadelphia) .  .    '■'■» 

.  ipe  fitter,  (navy  yard,  Philadelphia)      '^^ 

s:i:?nC^t^rZ',T  ^'^"•"'^  "--«.)•••:: ::;;;;:;::;:;:;:  ;^^ 

&i=^E.:;:i:  eH^.Sr"-  ^^^«^'"«-.  o'-n) : : : :  It: 

Machini«t!i  (dhinyanl.  San  Franriwo)            '■♦4 

Kle< irinan.  (.hipyard.  Sin  Kran.iiKo) '■»4 

>nipwright»,  joiner.,  boatmen,  millmen  (.hinva'nV  S.n  F,«n,-'  '  \  '  '"^ 

r  M*""^  '^V"  "«•  bituminou.  (Hock7nK  Val  ey  duir^n  ^""'^'^"^      ■  «47 

Cotton  fini.hinK  manufa.  turing  (earniriKH)                      '*' 

Ho.iery  am   underwear  manufacturinK  (earninK.) I" 

(  ommon  lalmr  (iron  and  »leel) .                 »^">"li*l ,,7 

Blast  furnace,  (iron  and  .teel)                  '*° 

I^oftmnen  (shipyards,  Delaware  Ri\;r)    '*' 

Elcttrician.  (.hipyard.,  Delaware  River) '^'' 

?n»i'!"^"''  T'^"^  ('hiDyard,  San  Kr.incis<:oi '. !*« 

Cotton  manufacturing  (earninB.)                              '^S 

0(K-n  hearth.  (i,on  i.ii,l  steel)        '6S 

Sheet-met..l  workers  (siiipy.ir.ls,  Delaware  River) '5' 

Machinists  (shipyards,  Delaware  River)                  '^7 

Woolen  manufacturinsf  (earninifi)             '"7 

K.yeters  (shipyards,  Delaware  River)    '7«> 

B«>t  .i'*l'*'h  ''"•"'I  '^■"'P^""".*^  bituminou.  (H,k  king  Valley. \U 

Mo<it  and  shoe  industrv  (earninirsl                                     »a"cy 175 

I  olders-on  (shipyards,  Del.iware  River') "77 

Hhcksmith.  (shipyards,  DeUware  River) ''7 

' ao5 

•Hugh  S.  Hanna  and  W.  Sett  Uuck:  op.  Ji., ,,.  ,3,,. 


-A 


■M 


r!«a 

if" 


196 


PRICES  AND   PRICE   CONTROL  DURING  THE   WAR 


According  to  the  information  in  the  possession  of  the  Bureau 
of  Labor  Statistics,  the  per  capita  oarnings  in  the  iron  and  steel 
plants  of  the  country  were-  88  per  cent  higher  in  October, 
1917,  than  in  January,  1915.  By  departments  the  increases 
in  the  average  earnings  per  hour,  in  September,  1917,  as 
compared  with  May,  1915,  were  as  follows:  in  blast  furnaces, 
52  per  cent;  in  Bessemer  converters,  58  per  cent;  in  open 
hearth  furnaces,  38  per  cent;  in  blooming  mills,  35  per  cent; 
in  plate  mills,  50  per  cent;  and  in  sheet  mills,  95  per  cent.  An 
additional  ten  per  cent  increase  was  granted  by  most  com- 
panies in  October,  191 7.' 

Generally  speaking,  increases  in  wages  were  greater  in  those 
trades  and  localities  which  were  poorly  organized;  this  was 
due  largely  to  the  fact  that  they  were,  as  a  rule,  previously  on 
a  much  lower  level  of  compensation.  Much  smaller  advances 
on  the  average  are  shown  by  the  figures  for  union  wage  scales. 
Taking  the  rates  for  1913  as  100,  these  figures  give  the  in- 
creases in  the  rates  of  wages  per  hour  as  follows :' 


1913 
1914 
1915 
1916. 

1917 


100 

103 

"03 

107 
114 


For  agricultural  laborers  the  increase  in  average  wages  per 
month  was :  * 


Section 


Average 
Wages  per  Month 


North  Atlantic $33 

So-th  Atlantic 19 

North  Central  east  of  Mississippi  River.  .  .  31 

North  Central  west  of  Mississippi  River. .  .  35 

South  Central 21 

Far  Western 46 

United  States 27 


1910 


•19 

75 
.81 

45 
90 
.48 
50 


1917 
$48.06 
30.80 
44.98 
49.46 
31  07 
63  59 
40.43 


Rate  of  In- 
crease Per 
Cent 

45 
56 
41 
40 

42 
37 
47 


It  is  difficult  to  arrive  at  any  definite  conclusion  as  to 
what  was  the  actual  .^-.crease  in  the  rates  of  wages  from  the 

'  N.  C.  Adams:  "Wages  and  Hours  of  Labor  in  the  Iron  and  Steel  Industry, 
September,  1917,  compared  with  May,  1915,"  Monthly  Revieui  of  the  U.  S.  Bureau 
of  Labor  Statistics,  March,  1918,  p.  29. 

'  Monthly  Labor  Revieui,  June,  1918,  p.  146. 

-  Monthly  Crop  P^;port,  March,  1918,  quoted  from  the  report  of  the  Commit- 
tee on  War  Finance,  American  Economic  Association,  p.  105. 


THE    UNITED  STATES  igy 

beginning  of  the  war  to  the  end  of  1918;  it  does  not  seem 
that  wages  rose  as  rapidly  as  the  prices  of  commodities. 
However,  a  mere  study  of  the  rates  of  wages  is  not  sufficient 
for  the  determination  of  the  changes  in  the  standard  of  liv  ing 
and  in  the  general  welfare  of  the  lalwrers;  there  are  many 
other  factors  to  be  taken  into  account,  such  as  reduced  amount 
of  unemployment,  opportunity  for  going  into  higher  paid 
occupations,  overtime  work  with  extra  pay,  employment  of 
additional  members  of  the  family,  additional  expenses  of  the 
household  for  transportation,  board,  etc. 

The  purchasing  power  of  union  wages  measured  by  retail 
prices  of  food  is  given  by  the  Bureau  of  Labor  Statistics  as 
having  declined  as  follows:' 

The  wage  figures  are  for  May  of  each  year. 

Purchasing   Power  Measured  by   Retail 
V_.-  ^,  Prices  of  Food 

'  ■"  Of  Rates  of  Wages  Of  Rates  of  Wages 

per  Hour  per  Week,  Full  Time 

Illi::::::::::::::::::::::::::         iZ  - 

;il2:::::::::::::::::::::::::::         'Z  'Z 

'917 fl  2^ 

•9'« 79  '7I 

The  table  shows  that  an  hour's  wages  in  191 8  purchased 
but  79  per  cent  as  much  food  as  in  1913  and  a  week's  wages 
but  77  per  cent  as  much. 

Cost  of  Living 

The  increase  in  the  cost  of  food  in  the  United  States  in  the 
opinion  of  the  Food  Administration  has  been  greatly  over- 
estimated by  laying  too  much  emphasis  on  special  cases.  A 
computation  of  the  nation's  food  bill  prepared  by  the  Ad- 

inistration  for  each  three  months,  beginning  with  the 
second  quarter  of  1917,  down  to  the  second  quarter  of  1918 
showed  the  following  results  :* 

'  Monthly  Labor  Revieui,  March,  1919,  p.  119 
Official  Statement  of  the  U.  S.  Food  Administration,  October  i,  1918,  p.  5. 


1 1  il 


m 

.    ill  1 


§;• 


11 
w , 
':pi 


ih] 


i\\,i\ 

m 


198  PRICES  AND  PRICE  CONTROL  DURING  THE   WAR 

THE  NATION'S  FOOD  BILL 

2d  Quarter,  1917  3d  Quarter.  1917 

Total  Cost  Cost  per  Total  Cost  Cost  per 

„       ,      _  ^  >n  Dollars  Capita  in  Dollars  Capita 

Breadstuffs 1314,906,915  $.10383  $393.732..V4  $37844 

Vegetables 330.709,747  3  1905  152.884,830  i  .4694 

="«?'■ 200,674,663  1.9363  205,527,930  I.97S4 

f^r."'" 78,361.156  .7559  7 «. 290,290  .6852 

Oils  and  nuts 52,302.765  .5046  58,304,496  .5604 

t "" 26.140,445  .jjaa  26.326.613  .  2530 

S?^*"        , 764,882.65 1  7  3804  777,233,98 1  7  4705 

Poultry  and  eggs 221.956,895  2.1417  226.038.723  2  1726 

Dairy  products 573.665.667  5.5354  584,068,678  5.6138 

Total $2.563,600,904524.7353    $2,495,407,855   $23  9847 

4th  Quarter,  1917  ist  Quarter,  1918 

Total  Cost  Cost  per  Total  Cost  Cost  per 

„       ,      _                                    .  ">  Dollars  Capita  in  Dollars  Capita 

r,      .'ui      $348.,S54.7,S3  $3  3372  $35i,952,6i8  $3.3567 

Vegetables 136,899,969  1. 3107  143,179060  1.3655 

JlUK?"" 210,439,897  2.0148  190,016,407  1. 8122 

*;r""*,       • 70,506,614  .6750  75,057.007  .7158 

Oils  and  nuts 68.495.873  .6558  72,652.456  .6929 

{;.'*" 33.133.947  3172  40.631,802  .3875 

^eata.--    878,708,620  8. 4131  838,387.663  7,9961 

Poultry  and  eggs                          266.500,892  2.5516  304.216.881  2.9014 

Dairy  products                             641.510.693  6. 142 1  676.389.410  6  4510 

Total $2,654,751,258  S25.4175     $2,692,483,304  $25.6791 

2d  Quarter,  1918  Per  Cent  Increase  or 

Total  Cost  Cost  per  Decrease  over  2d 

in  Dollars  Capita  Quarter,  1917 

Breadstuffs $349,626,283  $3 .3216  +93 

Vegetables 123.903.476  i .  1768  -63 .  i 

Sugar 188.723.860  1.7930  -7.4 

Fruits 103.881.429  .9868  +305 

Oils  and  nuts 81.964.541  .7786  +54  3 

f'sh 24.732,401  .2349  -  6.9 

Meats 938,789,266  8.9192  +20.8 

Poultry  and  eggs                          262,577,561  2.4947  +165 

Dairy  products                             619,553,054  s  8863  +6.3 

Total $2,693,751,871  >J5. 5919  +3.5 

The  above  table  is  based  on  taking  the  total  food  consumed 
by  the  nation  divided  into  the  items  of  breadstufTs,  vegetables, 
meat,  etc.,  at  the  average  wholesale  price  for  the  quarter  and 
thus  arriving  at  what  the  nation  as  a  whole  actually  expended. 
The  increase  according  to  this  table  was  from  our  entry  into 
the  war  to  the  second  quarter  of  1918  from  $2,563,600,904 
to  $2,693,717,871.  or  3^  per  cent.  There  had  been  many  local 
variations,  prices  ha\ing  increased  to  a  larger  per  cent  where 
there  had  been  an  increase  in  population;  on  the  other  hand, 


THE   UNITED  STATES  gg^ 

there  were  corresponding  sections  of  the  community  where 
actual  decreases  or  no  increases  had  taken  place.  According 
to  the  Food  Admm.strat.ons  statement,  the  cost  of  r^-nt 
cIoth.ng,  transportation  and  other  items  of  liv  ing  advanced 
frn'^dltuffs'"^'  ^^  '""''''  ^'  *''*'  aggregate  increase  in  the  cost  of 
It  is  siirprising  that  the  Food  Administration  should  have 

food  b,ll.  The  value  of  the  whole  compilation  as  an  indicator 
of  changes  m  the  cost  of  living  is  very  doubtful.  It  certainly 
does  not  reflect  actual  conditions.  Retail  prices  alone  can  be 
used  w.th  any  degree  of  accuracy  in  order  to  measure  changes 
m  the  cost  of  l.vmg  and  even  retail  prices  are  ar^  uncertain 
gu.de  unless  one  ascertains  the  relative  importance  of  each 
Item  m  the  f  .mily  budget. 

The  National  Industrial  Conference  Board,  which  • .  esti- 
niat.ng  changes  in  the  cost  of  food  relied  chiefly  upon  the 
figures  collected  monthly  by  the  United  States  Bureau  of 
Labor  Stat.st.cs   arrived  at  the  conclusion  that  the  increase 
m  the  cost  of  food  enter.ng  into  the  family  budget  was  between 
July.  1914.  and  the  middle  of  June,  1918.  62  per  cent,  as  com- 
pared w.th  an  .ncrease  of  15  per  cent  for  rent.  77  per  cent  for 
cloth.ng.  45  per  cent  for  fuel  and  light  and  50  per  cent  for 
sundries  (.nclud.ng  such  items  as  recreation,  furniture,  reading 
matenal  tobacco,  etc.).     The  increases  in  cost  between  July 
1914.  and  November,  1918,  of  the  items  entering  into  the 
family  budget  were:' 

Food „  „ 

Shelter "3% 

Clothing 2" 

Fuel  and  light.  ...'.;  .■.'.' .' f} 

Sundries 5° 

The  increase  for  the  budget  as  a  whole  was  65.9  per  cent 

In  comb.n.ng  the  percentages  of  increase  for  the  respective 
.terns,  in  order  to  determine  the  average  increase  for  the  total 
budget,  food  was  taken  as  constituting  43  per  cent  of  the 

u 


aoo 


PRICES   AND  PRICE   CONTROL  DURING  THE   WAR 


family  expenditure,  rent  i8  per  cent,  clothing  13  per  cent, 
fuel  and  light  6  per  cent,  and  sundries  20  per  cent. 

The  budgets  considered  were  those  of  wage  earners  in  repre- 
sentative industrial  communities. 

A  brief  submitted  to  the  Director  General  of  Railroads  by 
the  Brotherhood  of  Locomotive  Firemen  and  Engineers  in 
connection  with  their  demands  for  increased  wages  contains 
some  valuable  cost  of  living  data,  which  show  the  cost  of 
specified  items  of  expenditure  in  the  working  men's  budget 
in  1900,  and  an  estimated  cost  of  similar  budgets  in  191 1, 
1914  and  1917.  The  budget  of  1900  is  based  upon  the  average 
expenditure  of  2,567  families,  as  ascertained  by  the  United 
States  Bureau  of  Labor  Statistics  and  published  in  its  report 
on  cost  of  living  (i8th  Annual  Report,  1903)-  The  figures 
for  191 1,  1914  and  1917  are  obtained  by  applying  to  the 
principal  items  of  the  1900  budget  the  percentages  of  increase 
in  those  years  as  compared  with  1900.  According  to  these 
estimates,  the  total  expenditure  per  family  increased  43  per 
cent  from  1914  to  191 7.' 

ESTIMATED  WORKING  MEN'S  BUDGETS  IN  1911,  1914.  AND  1917,  AS 
COMPARED  WITH  1900 
Average 
Expendi- 
ture of  2,567       Estimated  Average  Expenditures 
Items  of  Expenditure            Working           of  a  Working  Man's  Family  in — 
Men's  Fami- 
lies in  1900  1911  1914  1917 

Food $32700  $430.00  $47700  $716.00 

Rent 100.00  13300  132.00  15900 

Mortgages 12.00  12.00  12.00  12.00 

Fuel  and  lighting 40.00  40.00  46.00  82.00 

Clothing 108.00  120.00  121.00  210.00 

Taxes 6.00  6.00  6.00  6.00 

Insurance 21.00  21.00  21,00  21.00 

Organizations 900  9.00  9.00  9.00 

Religious  purposes 8.00  8.00  8.00  8.00 

Charity 300  3.00  300  3.00 

Furniture  and  utensils 26.00  26.00  3000  39  00 

Books,  newspapers 8.00  8.00  8.00  9.00 

Amusements,  vacation 12.00  12.00  12.00  1300 

Liquors 12.00  12.00  12.00  14.00 

Tobacco 11.00  11.00  11.00  12.00 

Sickness,  death 21.00  21.00  2100  21.00 

Other  purposes 4500  5100  50.00  67.00 

Total 769.00  923.00        979.00     1,401.00 

>  Monthly  Review  of  the  Bureau  of  Labor  Statistics,  April,  1918,  p.  192. 


THE    UNITED   STATES 


301 


An  investigation  by  the  Bureau  of  Labor  of  the  changes  in 
retail  prices  m  connection  with  the  cost  of  living  in  shipbuild- 
ing centers  of  the  country  showed  that  the  percentages  of 
increase  m  these  centers  were  greater  than  the  findings  of 
the  Industrial   Board  or  of  the   Brotherhm,d  of  Locomotive 
Firemen  and  Engineers  indicate  for  the  country  as  a  whole 
Ihe  per  cent  of  increase  in  December,  iq,8,  oxer  J)erember 
1914.  was,  in  a  family  budget  for  Philadelphia:     f<M,d   8x  x^ 
per  c^nt;  clothing,  in. ,6  per  cent;  housing.  8  per  cent;  fuVl 
and  light.  47.94  per  -ent;  furniture  and  furnishings.  10760 
per  cent ;  miscellaneous.  67.47  per  cent ;  all  items.  75  02     The 
increase  for  the  total  budget  in  New  York  was  78.79  per  cenf 
in  Baltimore,  86:37;  in  Seattle.  70.47:  in  Chicago,  74.14;  in 
i»an  Francisco  and  Oakland,  58.38.' 

A  number  of  other  local  investigations  into  the  increase  in 
the  cost  of  living  were  made  from  time  to  time;  such  wa« 
for  instance,  an  investigation  by  a  committee  of  employes  of 
the  Bankers  Trust  Company  of  New  ^ork,  which  came  to 
the  conclusion  that  retail  prices  of  food  had  risen  60  per  cent 
between  1915  and  June  30,  1918.=  The  Bureau  of  Labor  of 
the  State  of  Washington  placed  the  increase  in  the  cost  of 
groceries,  meat  and  fish  between  April,  1914.  and  April.  1918 
at  51  per  cent  in  Seattle.  47  per  cent  in  Tacoma  and  ss  per 
cent  in  Spokane.  ^ 

As  to  any  definite  conclusions  regarding  increased  cost  of 
hving  and  the  effect  of  this  increase  upon  the  status  of  the 
working  man  and  his  family,  one  may  subscribe  without  reser- 
vation to  the  statements  of  the  United  State.  Commissioner 
of  Labor  Statistics,  that  "after  all  these  years  of  inxestigation 
and  statistical  toil  in  the  cr.st  of  living  field,  we  don't  know 
clearly  the  difference  between  the  higher  cost  of  living  and 
the  costs  of  higher  living,"  and  that  "no  .^n  not,  to  save  our 
lives,  tell  whether  the  Seattle  family  with  an  income  of 
$1,569.10  is  better  or  worse  off  than  the  New  York  family 

'  Uonlhly  Labor  Rnieu;  May.  1919,  pp.  166-168. 
Indusinal  News  Suney,  Cost  of  Living  Supplement.  August  19-26.  1918,  p.  4. 


i'l' 


303 


PRICES  AND   PRICE  CONTROL  DURING  THE   WAR 


with  $1,348.64  income.  We  do  know  that  most  workmen's 
families  spend  all  their  income.  Does  it  mean  that  American 
families  are  extravagant  or  does  it  mean  that  they  are  living 
at  or  below  the  margin  of  decency  and  health?"' 

»  Royal  Meeker:  "The  Poisibility  of  Compiling  a  Co»t  of  Living    Index," 
Monthly  Labor  Review,  March,  1918,  p.  7. 


CHAPTER  III 

Legislation  Authorizing  Price  Fixing  and  Price  Fixing 
Agencies 

The  Xational  Defense  Act.  approved  June  3,  1916.  gave  the 
President  po^    •  to  fix  prices  at  which  materials  could  be 
purchased  for  the  use  of  the  goxernment.    There  was  some 
question  as  to  whether  his  power  extended  to  the  materials 
to  be  used  by  the  Allies,  but  the  consensus  of  legal  opinion 
was  that  the  power  applied  that  far.    To  the  War  Depart- 
ment was  delegated  the  authority  to  require  that  manu- 
acturers  of  arms,  ammunitions,  supplies  and  ec,ui,)ment  for 
the  army  should  sell  their  products  at  a  reasclnable  price 
agreed  upon  by  the  Department. 

Similar  authority  was  given  by  the  law  of  March  4.  ,9,7 
to  he  Navy  Department;  the  law  referred  to  ships  and  war 
materials  for  the  navy;  it  differed  from  the  act  dealing  with 
the  army  s  requirements  in  that  it  provided  that  if  the  owner 
was  not  satisfied  with  the  compensation  fixed  l.y  the  Presi- 
dent he  could  accept  fifty  per  cent  and  have  the  actual  amount 
to  which  he  was  entitled  ascertained  by  the  courts.' 

VVhen  in  June.  191 7,  special  appropriations  were  made  for 
use  by  the  Shipping  Board  in  acquiring  merchant  vessels,  the 
President  was  given  powers  to  place  orders  for  the  construc- 
tion of  merchant  ships  at  prices  considered  by  him  as  reason- 
able He  was  also  empowered  to  requisition  shipbuilding 
plants,  as  well  as  merchant  vessels  which  were  under  construc- 
tion in  American  yards,  charters  for  merchant  vecsels,  etc 
Those  who  felt  di....Jsfied  with  the  compensation  allowed  by 
the  President  could  accept  seventy-five  per  cent  of  this 
compensation,  leaving  the  proper  amount  to  be  decided  by 
the  federal  courts. 

203 


;* 


9 


ao4 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


The  first  agreements  as  to  prices  between  governmental 
agencies  and  producers  can  be  traced  to  the  Council  of 
National  Defense  and  its  Advisory  Commission,  both  of 
which  were  created  in  a  section  of  the  Army  Appropriation 
Act,  approved  August  29,  1916.  The  council  was  established 
to  study  the  industrial  and  transportation  systems  of  the 
United  States  and  to  make  recommendations  as  to  the  best 
methods  which  might  be  utilized  in  case  of  some  possible 
future  war.  The  Advisory  Commission,  consisting  of  seven 
industrial  or  commercial  experts,  was  to  guide  the  council 
in  this  work.' 

The  commission  divided  itself  into  seven  committees,  two 
of  which,  the  one  on  supplies,  with  Julius  Rosenwald  as  chair- 
man, and  the  other  on  raw  materials,  minerals  and  metals, 
under  the  chairmanship  of  Bernard  M.  Baruch,  soon  assumed, 
in  addition  to  their  advisory  functions,  a  largf^  place  in  the 
actual  administration  of  the  affairs  of  the  contracting  depart- 
ments.' Although  having  to  contend  with  a  certain  amount 
of  opposition  to  their  activities  from  the  military  officials  in 
charge  of  various  bureaus,  they  succeeded  in  inaugurating  the 
policy  of  personal  conferences  at  Washington  with  manu- 
facturers and  producers  of  essential  commodities.  As  a  result 
of  such  conferences,  informal  price  agreements  were  entered 
into,  the  effect  of  which  was  "not  only  to  save  the  govern- 
ment a  great  deal  of  money"  but  also  to  prevent  wholesale 
open  market  bidding  by  government  bureaus,  which  would 
have  caused  great  price  stimulation  and  which  would  have 
led  to  a  more  rapid  advance  in  prices  than  took  place  at  the 
time.  This  method  of  agreements  was  used  extensively  in 
the  subsequent  fixing  of  prices  by  the  War  Industries  Board, 
which  was  established  on  July  28,  191 7,  to  succeed  the  Gen- 
eral Munitions  Board.  The  latter  was  created  early  in  191 7 
as  the  first  attempt  at  a  coordinating  agency  to  counteract 
the  tendency  on  the  part  of  the  purchasing  bureaus  of  the  War 

'  C.  N.  Hitchcock:  "The  War  Industries  Board,"  Journal  of  Political  Economy, 
June,  1918,  p.  548. 
«/Wd.,p.55i. 


THE   UNITED  STATES 


305 


Department  to  bid  against  each  other  for  supplies  and  ma. 
terials.     The  Jjoard  had  also  the  task  of  planning  for  the 
production  of  munitions.    It  gave  particular  attention  to  the 
question  of  prices.     Notwithstanding  the  energetic  eflforts  as 
well  as  the  tact  and  diplomacy  of  Frank  A.  Scott,  the  chair- 
man of  the  board,  the  lack  of  adequate  i)owirs  and  the  Uxtsc 
organization  of  the  Ixiard  prevented  it  from  being  of  much 
service.  The  initiative  and  the  final  decisions  continual  to  rest 
with  the  heads  of  the  War  Department  bureaus,  who  merely 
consulted  the  lx)ard  "when  time  ixrmitted."     The  Muni- 
tions Board,  despite  its  manifest  weaknesses,  servetl  in  a 
limited  measure  as  a  clearing  house  for  orders,  thus  preventing 
the  more  flagrant  cases  of   competition    between    lifferent 
bureaus  and  giving  an  opportunity  for  common  counsel  on 
questions  of  price. 

The  War  Industries  Board,  like  the  Munitions  Board, 
which  It  succeeded,  derived  its  power  from  tlu'  Council  of 
National  Defense.  One  of  the  functions  of  the  new  board,  in 
the  words  of  the  statement  which  created  it.  was  to  "consider 
price  factors."  As  the  council  itself  had  no  authority  to  fix 
prices,  it  could  not  delegate  any  such  authority  to  the  board 
The  Price  Fixing  Committee  of  the  War  Industries  Board 
was  not  created  until  March  14.  1918.  Its  functions  were 
made  independent  of  those  of  the  Ix^ard.  and  it  could  report 
directly  to  the  President. 

The  articles  dealt  with  by  the  Price  Fixing  Committee  in- 
cluded iron  and  steel,  copper,  lumber,  hides  and  leather,  wool, 
cotton  fabrics,  nickel,  aluminum,  quicksilver,  zinc,  nitric  and 
sulphuric  acid,  cement,  hollow  tiles,  brick,  sand  and  gravel. 
Thus,  its  scope  was  of  wide  range  with  regard  to  articles 
affected.  The  reason  why  all  these  commodities  were  brought 
under  control  may  be  found  in  the  war  needs  for  great  quan- 
tities of  each  of  these  articles.  .Almost  the  entire  supply  of 
some  of  them  was  sought  either  by  the  United  States  Govern- 
ment or  by  the  Government  of  the  Allies. 

The  primary  function  of  the  Price  Fixing  Committee  was 
the  protection  of  the  interests  of  the  government.     Private 


11 


3o6 


PRICES  AND  miCB  CONTROL  PVRING  THE  WAR 


consumers  were  ct)n8iclere(l  only  in  so  far  as  the  principle  of 
one  price  for  all  was  adhered  to  in  the  committee's  agreements 
with  various  producers.  The  committee's  regulations  never 
extended  to  retail  dealers  and  only  in  a  small  tlegrec  to 
wholesalers.' 

The  regulation  of  prices  after  the  I'nited  States  entere<i 
the  war  was  carried  on  by  two  other  agencies:  the  Food 
Administration  and  the  Fuel  Administration.  They  were 
both  established  in  order  to  administer  the  provisions  of  the 
Lever  Food  Control  Act.  Unlike  the  Price  Fixing  Committee 
of  the  War  Industries  Board  Iwth  the  Food  Administration 
and  the  Fuel  Administration  undertf)olc  to  regulate  prices 
ail  the  way  from  producer  to  consumer.  This  was  d(»ne  by 
means  of  fixing  basic  prices  as  well  as  by  establishing  maximum 
margins  for  the  middlemen. 


The  Food  Control  Act 

Various  food  bills  had  been  submitted  to  both  houses  of 
Congress  since  April  2,  191 7.  Of  all  these  bills  two  have  been 
drafted  in  committee  and  after  having  been  introduced  twice 
in  different  forms,  passed  both  branches  of  legislature.  The 
first  of  these,  the  Food  Survey,  or  Production  Bill,  provided 
merely  for  an  investigation  of  food  conditions;  it  was  enacted 
without  much  onposition.  The  second  bill,  the  Lever  Food 
Control  Bill,  after  weeks  of  delay,  was  reported  on  June  13, 
191 7,  by  the  House  Committee  on  Agriculture  for  favorable 
action.  This  bill  gave  rise  to  very  bitter  debates  both  in  the 
House  and  in  the  Senate. 

The  opponents  of  the  bill  attackeil  it  as  being  entirely  out 
of  place  in  a  "republic  of  freemen"  (Senator  Reed  of  Missouri).* 
Senator  Gore  denounced  it  as  the  "sweepings"  of  all  the  Brit- 
ish and  Canadian  food  acts  and  orders  in  council,  and  declared 
that  if  passed  "it  would  cause  losses  to  producers  (in  1917) 
of  $250,000,000  in  wheat  and  $500,000,000  in  corn  and  result 

'  F.  W.  Taussig;:  "  Price  Fixing  as  Seen  by  a  Price  Fixer,"  Qnarttrty  Journal  of 
Economic,  February,  1919,  p.  308. 
•  The  Literary  Digest,  June  30, 1917,  p.  1976. 


THE   UMTKD  STATES 


207 


In  famine  noxt  year  through  rwluced  pnKhutM.n."  Senator 
(K)re  M.ught  to  amend  rather  than  defeat  the  l>ill  He  like 
the  majority  of  the  bill's  opp<,nent..  felt  that  the  situation 
required  some  governn.ent  action,  hut  he  ol,jecte<l  to  an  act 
which  according  to  him  was  placing  ten.  much  ,K,wer  in  the 
hands  of  one  man. 

One  of  the  most  vicious  press  attacks  on  the  asure 
appeare<l  .n  the  New  York  £.r«m.  Sun  whi.  h  held  tne  pro- 
jK,se«i  food  legislation  .)f  extreme  danger  to  the  country  Ik?- 
cause  It  was  lx.und  to  pnxluce  the  ^ery  exils  it  pretended  to 
avert  namely  reduced  production,  chaos  in  marketing,  the 
withdrawal  of  capital  and  expert  skill  from  the  fmnl  trades 
panicky  buying,  high  prices  and  crriexous  shortage  at  the 
points  of  consumption."  According  to  chis  paper  the  bill  was 
bc.und  to  erect  an  all-pervasive  despotism  which  would  cove, 
the  land,  the  factory,  the  mart  and  the  home. 

President  NVilson  in  reommending  the  adoption  of  the 
measure  stated  that  its  object  was  not  to  control  the  fo<.d  of 
the  country,  but  to  release  it  from  the  control  of  s,K>culators 
and  other  persons  who  will  seek  to  make  inordinate  profits. 
Secretary  o  Agriculture  Houston  defined  as  the  purposes 
of  the  bill  to  facilitate  and  clear  the  channels  <,f  distribu- 
tion, prevent  hoarding,  assi-re  fair  prices,  restrain  injurious 
speculation,  prohibit  evil  pracfces  on  exchanges,  protect  the 
public  against  corners  and  extortions  and  reduce  waste."' 

-As  finally  passed  on  August  8.  19,7.  the  bill  emlxxlied  most 
of  the  provisions  which  President  Wilson  requested  The 
proposed  amendment  providing  for  a  three-man  focnl  admin- 
istration instead  of  one  administrator  was  defeated  as  were 
also  many  other  amendments  aiming  at  the  curtailment  of 
the  powers  of  the  food  controller. 

The  most  important  provisions  of  the  Food  Conuol  Act 
IH^  K.  4961)  as  they  applied  to  price  regulation  were- 

Section  I  provided  for  the  establishment  of  governmental 
control  over  the  supply,  distribution  and  mo^•ement  of  food, 
feeds,    fuel,   and   fertilizer  and   fertilizer  ingredients,    tools, 
»  The  LUerary  Digtit,  June  30.  1917.  p.  1976. 


t. 


its 

is  f 


ao» 


mtCM  AND  PRICK  CONT  tOL  DURING  THE  WAR 


'd  equipment  required  for 
d  fiieU.     All  i-(>mmodities 


utensiU,  implementu,  machinery 
the  priMluction  i)f  UmkU,  feed'- 
mentioni'd  were  calJMl  nee  ■». 

Section  4  made  it  unlawful  for  any  person  wilfully  to  destroy 
any  nece»Harie»  for  the  purpose  of  enhanring  the  price  or  re- 
strictinR  the  Hupply  therwjf;  knowingly  to  commit  waste  or 
w  i.iully  to  permit  preventable  deterioration  of  any  necessaries; 
to  hoarti,  to  monopr)lize  or  attempt  to  monopolize  necessaries; 
to  make  unjust,  or  unreasonable  charges  in  handling  or  deal- 
ing with  necessaries.  1 1  was  forbi<lden  to  combine,  conspire  or 
agree  with  a  /  other  person  to  restrict  the  supply,  distribution 
or  manufacture  of  necessaries  in  order  to  enhance  the  price. 

Section  5  gave  the  President  authority  to  lio-nse  the  im- 
portation, manufacture,  storage,  mining  or  distribution  of  any 
necessaries.  No  one  but  licensees  were  permitted  to  engage 
in  these  activities,  exception  having  been  made  for  producers 
of  agricultural  products,  cooperative  societies  dealing  with 
agricultural  prtxlucts  produced  by  their  members,  retailers 
whose  business  was  less  than  $100,000  per  annum  and  common 
carriers. 

Section  6  pnivided  that  necessaries  shall  not  !«?  hoarded 
beyond  the  reasonable  requirements  of  the  individual  or 
business. 

Section  10  authorized  the  President  to  purchase,  store  and 
provide  storage  facilities  for  and  to  sell  at  reasonable  prices 
wheat,  flour,  meal,  beans  and  potatoes. 

Section  12  proNidiKl  for  the  taking  over  and  oiwration  by 
the  government  of  any  factory,  packing  house,  pipe  line,  mine 
or  other  plant,  in  which  necessaries  were  manufactured  or 
mined,  if  such  action  was  deemed  necessary  to  secure  an  ade- 
quate supply  of  necessaries  for  the  army  and  navy  or  for  other 
public  use. 

Section  13  authorized  the  President  to  prescribe  regulations 
for  the  exchanges,  boards  of  trade  and  similar  organizations, 
dealing  in  necessaries,  should  he  find  such  regulations  neces- 
sary in  order  to  prevent  enhancement,  depression,  fluctuation 
of  prices  or  injurious  speculation  and  manipulation. 


THE   INITED  ATATRA 


«>9 


Section  14  providwl  that  should  the  I'rtiiiflcnt  find  an 
cmcrginry  cxi»tinK  rw|uirlnK  stimulation  of  the  pro«lurtion 
of  wheat,  hr  touid  Kuaranttt>  for  a  peri»Kl  not  exceedinK  18 
nionthH  a  price  w hii  h  w«>uld  •  nsure  prtHluieri*  a  reuMinahle 
profit;  No.  I  northern  sprinK  wheat  at  the  prineipid  interior 
markets  wa«  matle  the  basin  u|N)n  which  the  Kuaranty  for  the 
various  crops  was  to  U'  calculated.  A  guaranteed  price  of  $3 
a  hushel  for  No.  i  northern  spring  wheat  was  established  for 
the  crop  of  1918.  The  President  was  gixen  authority  to  in- 
crease the  import  duties  on  necessaries  shoulil  he  tmd  this 
advisable  to  prevent  undue  imjK)rtation  from  other  countries. 

Section  ly  appropriated  Si5o.<x)o.o<m)  to  be  used  in  carrying 
out  the  business  ojHrations  authorized  by  the  act. 

Section  24  pro\  ijiwl  that  the  act  should  ceas«'  to  o|H'rate  at 
the  termination  of  the  war  k'tween  the  Inited  States  and 
Germany. 

Section  25  gave  the  President  most  comprehensive  iK)wer9  in 
regard  to  the  pnnluction  and  dealing  in  coal  and  coke.  He 
was  auth«)rized  to  fix  the  price  of  coal  and  coke,  wherever  and 
whenever  sold;  he  could  requisition  and  take  over  the  plant, 
business  and  appurtenances  of  any  prcnlucer  or  dealer  who 
failed  to  conform  to  the  im|K)se<l  prices  and  regulations.  If 
he  thought  it  necessary  for  the  successful  prosecution  of  the 
war.  he  could  retjuire  that  th'e  total  output  of  coal  should  be 
sokl  exclusively  to  the  I'nited  States,  to  be  n-sold  by  Kovern- 
ment  agencies.  To  make  the  pro\isions  of  the  act  effective, 
the  F'cderal  Trade  Commission  was  authorized  to  make  a  full 
inquiry  into  the  management  and  costs  of  coal  and  coke,  in 
order  that  the  President  might  fix  the  maximum  price  for  the 
coal  and  coke  of  any  locality. 


4 


The  Food  Administration 

While  the  Food  Administration  had  no  authority  to  fix 
prices  by  decree,  it  could  eflfectively  regulate  them  through  the 
system  of  licensing  dealers  in  foodstuffs,  through  the  control 
of  food  buying  for  the  army,  the  navy  and  the  Allies,  and 


2IO 


PRICES  AND   PRICE  CONTROL   DURING  THE   WAR 


throujjh  the  power  of  preventing  hoarding,  speculation  and 
the  taking  of  unreasonable  profits. 

The  Food  Administration  had  from  the  very  outset  of  its 
activities  set  before  itself  as  one  of  its  main  tasks  the  attaining 
of  price  stability  in  the  essential  commodities.  Mr.  Hoover 
realized  the  necessity  of  stimulating  production  on  one  hand 
and  of  enforcing  conservation  on  the  other,  but  he  did  not 
believe  that  these  two  aims  could  best  be  served  by  "a  run- 
away market  and  by  exorbitant  prices."  His  first  public 
statement  after  his  appointment  as  Food  Administrator  thus 
defined  the  work  before  him:  "to  so  guide  the  trade  in  the 
fundamental  food  commodities  as  to  eliminate  vicious  specu- 
lation, extortion  and  wasteful  practices  and  to  stabilize  prices 
in  the  essential  staples."' 

Two  methods  were  open  for  the  purpose  of  carrying  into 
effect  the  provisions  of  the  Food  Control  Act:  (i)  recourse 
to  criminal  proceedings,  (2)  administrative  action,  i.e.,  revo- 
cations of  license,  temporary  suspensions,  requisitions,  etc. 
The  general  attitude  of  the  Food  Administration  towards 
the  offender  has  been  that  penalties  were  less  important  than 
securing  compliance  with  the  Administration's  policies.* 

The  comparative  success  of  the  Food  Administration  in 
dealing  with  the  countless  and  complex  problems  which  were 
involved  in  the  stimulation  of  production,  prevention  of  hoard- 
ing and  of  speculation,  stabilization  of  prices,  equalization  of 
distribution  and  enforcement  of  conservation  may  be  attrib- 
uted to  the  great  skill  with  which  Mr.  Hoover  organized  his 
administration  and  to  his  understanding  of  the  psychology  of 
the  American  people  aroused  by  the  demands  of  the  war.» 
Mr.  Hoover  has  shown  that  it  is  possii)Ie  to  have  a  bureau- 
cratic machine  without  its  concomitant  defects  of  unwieldi- 
ness  and  of  rigidity.  His  office  had  none  of  the  traits  of  the 
conventional  Washington  office.*  While  in  the  Food  Admin- 
istration there  were  as  many  subordinate  bureaus  as  perhaps 

'  C.  R.  Van  Hise:  Conservation  and  Regulation,  Part  ii,  p.  83. 

•Official  Statement  of  the  U.  S.  Food  Administration,  June  6,  1918,  p.  i. 

•  "Hoover,  His  Food  .Administration,"  Review  of  Reviews,  p.  283. 

*C.  Merz:  "Strategy  in  Food,"  The  New  Republic,  January  26,  1918. 


THE    UNITED  STATES 


an 


in  any  other  organization  in  Washington,  these  bureaus  were 
called  merely  "divisions";  they  appeared  and  disappeared  as 
the  occasion  demanded,  and  the  chiefs  of  these  divisions  passed 
from  one  resp«,nsible  position  to  another  wherever  they  could 
be  most  genuinely  useful.  Becai  e  of  its  flexibility,  the  F*x>d 
Adm.n,stration  possessed  f  e  fa.ihn-  of  rapidly  adapting 
Itself  to  any  new  situation  m]  of  being  .;  e  to  handle  the 
work  expeditiously. 

Mr.  Hoover  sought  and   ir,  n.js-  instances  obtained  the 
voluntary  cooperation  of  the  representatives  of  various  busi- 
ness interests  which  were  placed  under  his  control     Most  of 
the  measures  passed  by  him  were  the  result  of  his  confer- 
ences with  those  who  were  to  be  affected  by  his  regulations 
and  most  of  the  important  positions  in  the  Food  Adminis- 
tration were  entrusted  to  successful  organizers  and  adminis- 
trators of  private  business  enterprises.      Air.   Hoo\er  was 
careful  to  make  it  clear  from  the  very  beginning  of  his  activi- 
ties that  he  did  not  wish  to  disturb  the  normal  channels  of 
business,  that  he  did  not  contemplate  to  supplant  any  eco- 
nomic  factors   which    were   performing   a   useful   function 
Realizing  the  futility  of  attempting  to  solve  in  one  central 
organization  the  manifold  and  pressing  problems  of  produc- 
tion and  distribution  of  foodstuffs  throughout  all  parts  of  the 
country,  he  enlisted  the  services  of  every  State  and  munici- 
pality m  the  union.    Each  State  was  placed  under  the  super- 
vision of  a  Federal  Food  Administrator  who  was  appointed 
by  the  President  upon  Mr.  Hoover's  recommendation.    Like 
Mr.  Hoover,  these  officials  were  \olunteers.  receiving  no  pay 
for  their  services.     Administrators  were  also  appointed  for 
each  county  in  the  State;  the  county  administrators,  in  their 
turn,  organized  special  committees  to  look  after  the  food 
problems  in  every  city  and  township. 

Mr.  Hoover  constantly  objected  to  the  introduction  of  a 
system  of  compulsory  rationing.  His  objections  were  based 
on  the  following  grounds:  (i)  fifty  per  cent  of  the  population 
in  the  United  States  arc  either  producers  or  live  in  intimate 
contact  with  the  producers  and  therefore  can  not  be  restrained 


313 


PRICES  AND  PRICE  CONTROL  DURING   THE  WAR 


in  their  consumption  by  any  system  of  rationing;  (2)  the  habits 
of  consumption  of  the  American  population  with  regard  to 
any  given  commodity  vary  considerably  in  different  parts  of 
the  country ;  thus  while  the  northern  worker  consumes  about 
eight  pounds  of  wheat  products  a  week,  the  southern  worker 
does  not  require  more  than  two  pounds  of  such  products. 
The  rationing  of  wheat  on  any  broad  national  lines  would 
increase  the  consumption  beyond  necessity  in  the  south,  while 
in  the  north  it  would  decrease  it  below  necessity.  (3)  Restric- 
tion of  consumption  of  the  very  poor  is  undesirable,  as  its 
consumption  is  not  above  what  is  strictly  necessary  for  the 
maintenance  of  health  and  strength  of  these  people;  (4)  com- 
pulsory rationing  would  mean  an  annual  cost  of  from  $10,000,- 
000  to  $15,000,000  to  the  government;  it  will  mean  the 
issuance  of  tickets  and  coupons  to  every  householder,  the 
maintenance  of  a  vast  administrative  organization  which 
would  have  to  see  to  it  that  the  rates  are  enforced  and  obeyed. 

The  Licensing  System  and  the  Control  of  Margins 

The  first  proclamation  issued  by  the  President  under  the 
licensing  power  granted  to  him  by  the  Food  Control  Act 
applied  to  the  owners,  lessees  or  operators  of  wheat  or  rye 
elevators  and  to  all  persons,  firms,  corporations  and  associa- 
tions engaged  in  the  business  of  manufacturing  any  products 
derived  from  wheat  or  rye  (except  those  operating  mills  and 
manufacturing  plants  of  a  daily  capacity  of  one  hundred  bar- 
rels or  less  and  farmers  and  cooperative  associations  of 
farmers).  This  proclamation  was  issued  on  August  14,  1917, 
to  become  effective  on  September  i,  191 7,  after  which  date 
no  one  was  allowed  to  engage  in  the  wheat  and  rye  warehous- 
ing or  manufacturing  business  without  having  previously 
secured  a  license.'  The  next  interests  brought  under  the 
licensing  control  were  the  importers,  manufacturers  and  re- 
finers of  sugar,  sugar  syrups  and  molasses;  they  were  required 
to  secure  a  license  on  or  before  October  I,  1917.^ 

'  U.  S.  Food  Administration,  Proclamation  cd  Executive  Orders  by  the  President, 
p.  6. 
» Ibid.,  p.  7. 


THE    UNITED  STATES 


ai3 


A  more  far-reaching  measure  was  passed  on  October  8 
191 7.  It  establishe.  a  liqpnsing  system  to  go  into  effect  on 
November  i.  which  gave  the  Food  Administration  power  to 
effectively  regulate  the  activities  of  all  persons  engaged  in 
the  importation,  manufacture,  storage  and  distribution  of 
certain  bas.c  foodstuffs.  The  commodities  enumerated  in 
the  new  proclamation  were: 

Wheat,  wheat  flour,  rye  or  rye  flour, 

Barley  or  barley  flour, 

Oats,  oatmeal  or  rolled  oats. 

Corn,  corn  grits,  corn  meal,  hominy,  corn  flour,  starch 

from  corn,  corn  oil,  corn  syrup  or  glucose. 
Rice,  rice  flour, 
Dried  beans. 
Pea  seed  or  dried  peas. 

Cottonseed,  cottonseed  oil,  cottonseed  cake  or  cottonseed 
meal. 

Peanut  oil  or  peanut  meal. 

Soya  bean  oil,  soya  bean  meal,  palm  oil  or  copra  oil 

Oleomargarine,  lard,  lard  substitutes,  oleo  oil  or  cooking 

l3.tS|  * 

Milk,  butter  or  cheese, 

Condensed,  evapora*^^ 

Fresh,  canned  or  cu 

Poultry  or  eggs, 

Fresh  or  frozen  fish 

Fresh  fruits  or  vegetables, 

Canned:  Peas,  dried  beans,  tomatoes,  corn,  salmon  or 
sardines. 

Dried:  Prunes,  apples,  peaches  or  raisins, 
Sugar,  syrups  or  molasses. 

Among  those  exempt  fror      ,e  operation  of  the  ruling  were- 
retailers  whose  gross  sales  of  food  commodities  did  not  ej   .  -d 
$100,000  per  annum;  common  carriers;  farmers,  gardeners 
cooperative  associations  of  farmers  or  gardeners  end  fisher- 


powdered  milk, 
pork  or  mutton, 


ml 


•V.     ( 

■1;iil 


^ 


214 


PRICES  AND   PRICE  CONTROL  DURING  THE   WAR 


men.'  The  announced  object  of  this  licensing  system  was 
(i)  to  liinit  the  prices  charged  by  eyery  licensee  to  a  reasonable 
amount  over  expenses,  and  to  forbid  the  acquisition  of  specu- 
lative profits  from  a  rising  market;  (2)  to  keep  ail  fof)d  com- 
modities moving  in  as  direct  line  and  with  as  little  delay  as 
practicable  to  the  consumer ;  and  (3)  to  limit,  as  far  as  prac- 
ticable, contracts  for  future  delivery  and  dealings  in  future 
contracts.'  No  licensee  could  "import,  manufacture,  store, 
distribute,  sell  or  otherwise  handle  any  food  commodities  on 
an  unjust,  exorbitant,  unreasonable,  discriminatory  or  unfair 
commission,  profit  or  storage  charge." 

With  respect  to  enumerated  commodities,  the  regulations 
required  that  profits  should  be  no  greater  than  a  reasonable 
advance  over,  the  actual  purchase  price  of  the  particular  goods 
sold,  without  regard  to  the  market  or  r  placement  value. 
In  determining  the  amount  of  such  advance,  the  Food 
Administration  announced  that  the  licensee  could  average  the 
cost  of  goods  of  each  class.  For  example,  the  cost  of  all  canned 
corn  on  hand  was  to  be  averaged  and  a  reasonable  advance 
over  such  average  was  to  be  deemed  a  fair  sale  price  for  canned 
corn;  but  the  licensee  was  not  permitted  to  average  the  cost 
of  all  licensed  commodities  on  hand  and  add  an  advance  over 
such  average. 

"Purchase  price"  was  not  meant  to  be  used  in  the  literal 
sense  of  the  net  invoice  price  of  the  goods,  but  included  freight 
to  the  public  railway  terminal  in  the  dealer's  town.  In  a 
subsequent  definition  of  the  "purchase  price"  in  connection 
with  cold  storage  butter,  eggs  and  poultry,  the  purchase  price 
was  stated  to  include  original  buying  price,  transportation, 
storage  and  insurance  charges,  interest  on  the  money  in- 
vested at  the  current  rates  during  the  period  of  storage  and 
actual  cost  of  printing  when  butter  is  put  in  print  form  from 
tubs  or  cubes.' 

'  For  a  detailed  list  of  exemptions,  see  U.  S.  Food  Administration,  Proclama- 
tion and  Execuiive  Orders  by  the  President,  p.  8. 

'  Monthly  Review  of  the  U.  S.  Bureau  of  Labor  Statistics.  December,  191 7,  p. 
1 167;  also  U.  S.  Food  Administration,  Policies  and  Plan  of  Operatiot  ,  p.  97. 

•  Special  Rules  and  Regulations  Governing  Dealers  in  Cold  Storage  Eggs  and 
Frozen  Poultry,  effective  March  2,  1918;  Special  Regulations  Governing  Manu- 
facturers, Dealers,  Brokers  and  Commission  Merchants  in  Butter,  July  19,  1918. 


THE   UNITED   STATES 

When  no  specific  margin  has  been  laid  down  by  the  Fo<,d 
Administration,    the    standard    of   reas<,nableness    w's    th 
proht  which  the  "dealer  customarily  enjoyed  on  the  same 
commodity  in  the  prewar  period  on  an  iL  market  Xr 
freely  competitive  conditions."     Even  when  maximum  mar 
gms  were  specihed.  it  was  expressly  stated  that  they  were 
o  be  regarded  as  "guides  only"  an.l  were  in  no  way  to  Hm 
the  general  principle  that  the  advance  was  to  be  rea La  le 
.n  relation  to  the  customary  prewar  profit  of  the  ind"  hi^    ■ 
as  in  the  ^•er>'  next  sentence  it  was  asserted  that  "high  mar 
gms.  even  I   customary  during  prewar  period,  are  not  jus  I 
ab  e  now.     it  was  evidently  possible  to  consider  as  a  rea.  „. 
aWe  margin  the  customary  prewar  margin  only  in  the  ^ase 
when  the  latter  was  reasonable  in  the  prewar  period^     An 
attemp   was  made  to  meet  the  difficulty  b>-  asserting  that  the 
reasonable  margin  for  any  particular  dealer  depended  urxm 
his   'cost  of  operation,"  the  cost  of  operation  referring  to 'te 
costs  assignable  to  the  particular  class  of  commodity 

Resales  within  the  trade  without  reasonable  justification 
especially  those  tending  to  result  in  higher  mirket  pr  ""' 
were  declared  unfair  practices.  ^Ket  prucs. 

Special  rules  prescribed  that  f.x^ds  which  hav,  been  h- 'd  in 
cold  storage  for  more  than  30  days  were  to  be  marked  ".t.ld 
storage  goods"  when  offered  for  sale;  other  rules  prohib  ted 
speculation  m  futures  on  canned  goods;  forbade  the  1 
rnent  of  potatoes  which  had  been  seriously  damaged ;  protec  ed 
the  producer  who  shipped  his  products  to  marke  on  c^n 
signmen  against  unfair  charges  by  commission  men.  broke^ 
and  auctioneers,  and  covered  many  other  points 

Although  the  small  retailers  of  food  were  exempt  from  the 
hcensing  provisions  of  the  Food  Control  Act.  they  were  for! 
bidden  under  the  terms  of  that  act  to  hoard,  monopolize 
waste  or  destroy  food,  or  to  conspire  with  any  one  Z^2t 
production,  distribution  or  supply,  or  to  exact  excessive  pnVes 

Economic  B^^slpr^^Slllrctr^^^^^^^^  .Administration."  An^rUan 


3I6 


PRICES  AND   PRICE   CONTROL   RVRINf,   THE   WAR 


on  any  commodity.  The  act  forbade  manufacturers  or  whole- 
salers to  sell  to  any  retailers  who  were  guilty  of  the  above 
mentioned  unfair  practices.  Retailers  doing  more  than 
$100,000  business  annually  were  required  to  secure  licenses. 
The  penalty  for  those  who  failed  to  obtain  a  license  was  five 
thousand  dollars  fine  or  two  years'  imprisonment.  The 
penalty  for  the  violation  of  the  rules  and  regulations  was  the 
revocation  of  the  license  and  criminal  prosecution. 

In  order  to  check  hoarding,  no  licensee  was  permitted  to 
keep  on  hand  or  under  control  food  supplies  for  more  than 
sixty  days  ahead.  Certain  exceptions  were  made  to  this 
ruling. 

The  Food  Administration  attempted  to  keep  track  of  the 
operations  of  all  licensees  by  means  of  regular  reports  which 
the  licensees  were  requested  to  submit  once  a  month.  It 
found  itself  swamped  with  such  reports,  which  it  was  unable 
to  examine  carefully.  After  May  I,  1918,  the  policy  of  re- 
quiring detailed  monthly  reports  was  abandoned. 

While  the  Food  Administration  had  no  authority  to  fix 
prices,  it  inaugurated  in  November,  191 7,  the  policy  of 
establishing  "price  interpreting  boards"  in  the  principal 
centers  of  population  and  of  publishing,  from  day  to  day, 
fair  retail  prices  at  which  foodstuffs  were  to  be  sold. 

A  couple  of  weeks  after  the  inauguration  of  the  licensing 
system,  Mr.  Hoover  piohibited  combination  sales  on  all 
groceries.'  The  order  forbade  "  the  sale  of  one  or  more  food 
commodities  upon  condition  that  the  purchaser  shall  buy  one 
or  more  other  food  commodities  from  the  seller."  The  single 
exception  to  the  ruling  was  the  permission  to  sell  sugar  in 
combination  with  corn  meal  at  the  rate  of  one  pound  of  sugar 
with  two  pounds  of  corn  meal ;  the  exception  was  made  as  a 
wheat  conservation  measure.  The  reason  given  for  the  issue 
of  the  order  was  that  "combination  sales  frequently  result  in 
the  sale  of  more  foodstuffs  than  the  particular  purchaser  would 
ordinarily  buy  and  are  therefore  determined  to  be  a  wasteful 

'Interstate  Grocer,  November  24,  1917,  p.  I. 


THE    UNITED   STATES 


217 


practice  within  the  meaning  of  section  4  of  the  Food  Control 
Act  of  August  10,  1917." 

On  December  10.  ,9,7.  the  control  by  moans  of  hcenses  was 
mended  to  .nclude  all  those  engage!  in  the  manufact'n  fo 
sale  of  bread,  cake,  crackers,  biscuits,  pastry  and  other  bak- 

tion  of  fij  ""P*^''"^'""'  "^.^nufacture.  st^.rage  and  distribu- 
tion of  feeds  copra,  palm  kernels,  pahn  kernel  oil.  peanuts 
and  green  coffee,  also  th.  malting  of  barley  or  other  g  ains 

of  t"h  T\T'''^''  ''"'^"'■"^  ^••^^^'"^'-'  ''^^'  "censing  ;:.er 

an  1  a  n^b  7"'?"'""  ^"  ^""^  '^^^^  "^'^^  '--•  -»onseed 
and  a  number  of  other  cornmwlities  ' 

ood  dealers  was  that  the  FckkI  Administration,  by  limiting 
traders  margins  and  regulating  their  methods,  has  ^elie^•ed 
them  of  the  responsibility  with  which  they  were  former 

o?  iS.  '  ^'  '"'""'"  ^"'  ""^"'"^■^^-  ^-  ^he  high  cost 

Other  classes  of  business  gradually  brought  under  license 

were  the  arsenic  industry  (since  November  20    im^      the 

ammonia  industry  (since  January  21.  ,9,8).  the  fertiHzJr  in- 

tT  ornrrl    "^  '"'  '^"^  ^"' ''''  ^^"^"^^--'-^  ^--  J"'y 

25.  1918)  The  c-arrymg  into  effect  of  the  pro.isions  of  the 
various  acts  which  extended  licensing  t.,  the  alK.ve  industrie! 
was  entrusted  t(,  the  Secretary  of  Agriculture  ' 

At  the  beginning  of  July,  iy,8.  the  Foo<|  Administration 
recommended  that  the  publication  of  "  fair  prices  "  her  of  " 
confined  to  large  cities,  should  be  extended  to  every  county 
in  the  country.^  Only  a  limited  number  of  staple  prod  ts 
such  as  rye  flour,  corn  meal,  sugar,  lard,  canned  corn  canned 
tomatoes,  dried  fruits,  eggs,  butter,  potatoes,  cheese,  ham "nd 
lard,  was  to  be  included  in  the  list.  It  was  suggested  that 
price  interpreting  boards  be  instituted,  consistingofrepresenta- 

1  Co^imjrooi  and  Financial  ChronicU,  May  2S   1018   d  27tc 

pp'  J;/,;^,^  Administration,  ProclamaUon  and  Executive  Orders  by  the  PrcsuUnt, 
*  Officml  Sutement  of  the  U.  S.  Food  Administration.  July  6,  ,9,8,  p.  4. 


I  liliP 

i  ii 


>m\ 


111  ■ 
m 


im 


3I8 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


tives  of  wholesale  grocers,  retailers  and  consumers.  The  Iward 
was  to  meet  at  least  once  a  week,  secure  from  the  wholesale 
representatives  the  prices  charged  by  them  to  the  retailer  and 
add  thereto  the  proper  margin  of  profit  for     \e  latter. 

The  cooperation  of  newspapers  was  secured  for  a  regular 
publication  of  "fair  prices,"  and  a  checking  system  was  in- 
stituted which  enabled  the  county  administrators  to  know 
whether  the  dealers  were  not  charging  prices  in  excess  of 
those  published;  for  this  puqxjse  the  aid  of  the  retail  price 
reporri .  located  in  each  county  was  invoked.  A  price  re- 
porting t  i-heme  was  also  established  in  order  to  keep  the  Food 
Administration  in  Washington  informed  of  the  prices  charged 
for  the  staple  commodities  in  the  various  parts  of  the  country. 


CHAPTER  IV 

Wheat,  Flour  and  Bread 

Wheat 

hi^irr^ri'''"  ""^  '"'"'"'  '"  '^'  ''"'■'^''  ^'«»^«  ^^"  from  its 
h  gh  evel  of  891.0,7.000  Lushels  in  ,9,4  and  ,.025.80,  00c 
bushels  ,n  ,9,5  to  639.886.CKK,  bushels  in  ,9,6;  but.  btau  c3 
a  large  surplus  from  the  preceding  year,  the  wheat  li.J^^on 
in  ,9,6  was  not  grave.  In  addition  to  the  crop  ,-8 
203.000  bushels  carried  over  from  the  previous  har^•es;.  pro- 
vided a  sufficient  supply  for  both  domestic  consumption  Zl 

^ruTV  '-"u"'  ''''  '^"^^  ^^"^'"'  -">^ro7.598  bushds    a 
compared  with  ,22.998.754  bushels,  our  three  year  prew  r 

totTfre    V''  TP  "'.'^•7'  ^"^^  ^^^""'^^  '^-'  increased      e 
to  al  area  under  cultivation,  but  the  winter  killing  had  re- 
sulted m  much  abandonment  and  a  low  average  yield,  so   hat 
he  total  prcKluction  in  ,9,7  was  not  far  in  excess  o    that  o 
19  6, ,....  650.828.000  bushels.     The  carry  over  from  the  pre 
cedmg  year  was  only  51.078.000  bushels,  the  lowest  in  many 

Obviously,  the  amount  of  wheat  was  insufficient  to  meet 
all  demands,  particularly  Ix-cause  of  the  fact  that  ruthless 
German  submanne  campaign  so  reduce«l  world  tonnage  as  to 
make  unavailable  the  wheat  from  Argentina.  India  and  <.ther 
distant  markets.  Upon  the  United  States  and  Canada  Yd 
the  burden  of  supplying  the  hread  needs  of  the  Allied  and 
neutral  countries  of  Europe. 

What  were  the  Allied  needs  for  ,9,7  wheat  mav  be  seen 
from  the  following  table:  2  "      '"  ''*^*^" 

Thw  year  average  prewar  imports  Bushels  Bushels 

1  hrii-  year  average  prewar  production cn«  a„  ..^    380,804,000 

Estimated  production   1017  590.675,000 

^  ' 350,o«x).ooo 

Deficiency 

Total  requirements  to  maintain  normal  consumption'.  lirfS 

Bre^)%^?^  Administration,  Polices  and  Plan  of  OperuHon  {Wheat,  Flour  and 
'Und.p.'it. 

319 


Nl 

'!-ii 


fp 


aao 


PRICES   AND   PURE   CKNTRCH,   DURINC  THE    WAR 


I* 

't 

-I 


The  average  price  of  No.  i  northern  Hpring  wheat  in  Minne- 
apolis. July  1,  1913.  to  June  30.  1914.  was  89  cents  a  bushel. 
The  price  rose  immediately  u|K>n  the  declaration  of  war  and 
for  the  second  half  «)f  1914  wheat  was  selling  at  $1.09  a  bushel.' 
It  continued  to  advance  steadily  through  the  winter  and  spring 
months  of  1915.  rising  to  $1.58  cents  in  May,  a  level  it  did  not 
reach  again  until  Septemlwr,  1916,  when  wheat  was  quoted  in 
Minneapolis  at  $1.61  cents.  Due  to  an  exceptional  harvest, 
prices  were  comparatively  low  during  the  latter  part  of  .915 
and  the  first  half  of  1916;  they  fluctuated  between  98  cents  a 
bushel  in  Septemlier,  1915.  and  $1.29  cents  in  January,  1916. 
The  advance  which  commenced  in  July,  1916,  carried  the 
price  to  $2.98  cents  a  bushel  in  May,  1917,  the  highest  price 
it  (  ver  reached  in  the  Minneapolis  market. 

rh'»  (Scent  of  prices  in  Chicago  during  the  period  from 
July.  1916,  to  July,  1917,  for  cash  No.  2  hard  winter  wheat 
was: ' 


July.  1916 $1  159 

August,  1916 1  437 

September.  1916 I   S?" 

October,  1916 I  73'' 

November,  1916 1 .88s 

December,  1916 I  ./J5 


January,  1917 $1  791 

February.  1917 i  696 

Mirch.  1917 1 .880 

April.  1917 »  377 

■^  -ly.  1917 3  o«3 

!une.  1917 a  675 


The  highest  price  for  wheat  in  the  history  of  the  Chicago 
Board  of  Trade  was  reached  at  the  beginning  of  May,  when 
cash  wheat  was  selling  at  $3.25.  There  was  very  little  benefit 
from  these  high  prices  for  the  farmer,  who,  according  to  the 
reports  of  the  Department  of  Agriculture,  received  for  the 
191 7  wheat  an  average  of  Si. 44  per  bushel,  the  bulk  of  the 
crop  ha\ing  been  marketed  by  the  producers  during  the  early 
part  of  the  harvest  year.  Manufacturers  and  distributors 
were  accused  by  many  of  having  forced  the  prices  up  by 
means  of  manipulating  the  market.  While  some  of  them  may 
have  made  large  profits  from  rising  prices,  it  is  hardly  fair  to 
put  ui)on  them  or  upon  the  speculators  on  the  exchanges  the 
blame  for  the  excessive  rise.     The  facts  are  that  American 

•  War  Industries  Board,  Bulletin  of  Monthly  Prices  during  the  War,  November, 
1918,  p.  62. 
'  U.  S.  Food  Administration,  Policies  and  Plan  of  Operation,  p.  7. 


THE    t'NtTBI)  STATRH 


aai 


busmeHH  interests  on   the  whole  ha.l   Inrn  vm\vavnring   to 
roHtnct  the  upwani  tren.l  of  wheat  prices,  an.l.  as  far  as  s,Hru. 
lativc  interests  were  concerned,  many  of  them  have  sol.l  short 
in  an  anticipation  that  the  price  will  ro  ,lown.     The  short 
sellers  overlookwl  the  fact  that  the  situation  on  the  other  si.le 
of  the  Atlantic  was  abnormal.     The  Wheat  Kxjx.rt  Company 
representing  the  Allies,  was  feverishly  l.uyinK  all  the  wheat  in 
sight,  buying  not  only  in  the  cash  market,  but  also  for  future 
delivery,  and  the  same  was  true  of  the  firms  representing 
neutral  governments.     To   this   uncontrollet    buying  from 
turope.  buying  that  was  abm.rbing  all  the  wheat  thrown  on 
the  market,  irrespective  of  the  price  it  commanded,  was 
added  an  unusual  demand  for  flour  by  many  |Kmic  stricken 
private  consumers  in  this  country.     In  order  to  Ik-  provided 
against  any  contingencies  they  were  laying  in  vast  supplies. 
1  he  blame  for  the  latter  situati.)n  was  ,,laced  by  some  writers 
upon  the  Uniti-d  States  Government  which  was  sending  out 
alarming  crop  reports  and  wh.)se  officials  were  continuously 
warning  the  public  that  unless  it  curtailed  consumption  a 
famine  would  lje  the  result.' 

The  wheat  market  Imame  so  "oversold"  and  the  situation 
so  alarming  that  on  May  12,   1917,  the  Chicago  Board  of 
Trade  suspended  all  tradings  in  May  wheat      It  apix.inted 
at  the  same  time  a  price  fixing  committee;  the  latter  held  a 
series  of  conferences  in  Chicago,  in  which  the  United  States 
District  Attorney  and  representatives  of  the  British  Govern- 
ment  took  part.     The  committee  prescrihed  the  settlement 
of  all  May  contracts  at  $3. 18  a  bushel.     Subsequently,  specu- 
lative trading  in  July  and  September  futures  was  also  pro- 
hibited.    The  settling  price  for  July  and  September  futures 
was  fixed  at  52.75  and  $2.45  respectively.     The  action  of  the 
Chicago  Board  of  Trade  suspending  speculation  was  followed 
by  similar  actions  at  St.  Louis.  Duluth.  Kansas  City,  Minne- 
apolis and  Toledo.' 

The  Food  Control  Act  guaranteed  a  minimum  price  of  S2.00 
I9'i7^'p^62^!**''''  "Bureaucracy  and  Food  Control."  American  Review  of  Reviews, 
•  Commercial  and  Financial  ChronirU,  March  30,  1918,  p.  ij8i. 


■  :;■  i  ■ 
111 

I^H 

n 


333 


PmCER  AND  HmCK  C»iNT«OL   Dl'RIMi  TIIK   WAB 


a  bushel  for  the  wheat  crop  «(  1917-18.  This  was  the  only 
price  fixed  by  leKislation  and  the  only  guaranteed  minimum 
price  which  was  in  existence  in  this  country  during  the  war. 
The  minimum  wan  later  raised  under  the  discretionary  powers 
of  the  President  to  $2.20,  and  the  same  price  was  extende<l  to 
the  crop  of  191 8-1 9. 

The  figure  of  $2.20  was  reachetl  by  nt)  careful  cost  inquiries 
or  statistical  computations  but  in  conse(]uence  of  a  desire  to 
increase  the  prtKluction  of  wheat  and  also  to  placate  the 
farmers.' 

Opinions  as  to  the  "fairness"  of  this  minimum  price  varied. 
Prof.  (i.  E.  Call  of  the  Kansas  State  College  of  Agriculture 
estimated  that  it  meant  an  average  net  profit  for  the  farmer 
of  Si. 41  f)er  bushel.  He  based  this  estimate  on  an  average 
value  of  $48  per  acre  for  the  wheat  land  of  the  country,  an 
average  crop  of  fourteen  bushels  to  the  acre,  and  an  average 
cost  of  78.7  cents  {ht  bushel  to  the  farmer.  On  the  other 
hand,  at  the  meeting  of  the  National  Xon-Partizan  League 
held  at  St.  Paul  in  the  latter  part  of  SeptemlH-r,  191 7.  Mr. 
I.  M.  Hagan,  North  Dakota's  Commissioner  of  Agriculture, 
presenteil  figures  to  prove  that  it  cost  a  North  Dakota  farmer 
over  S21  an  acre  to  raise  wheat.  .As  the  average  for  the  State 
was  only  seven  bushels  an  acre,  the  cost  for  raising  one  bushel 
of  wheat  was,  according  to  him,  $3.00.'  A  calculation  made 
by  a  Missouri  farmer  placed  the  average  cost  for  raising  a 
bushel  of  wheat  in  191 7,  with  a  yield  «)f  I9i  bushels  per  acre, 
at  $1.8152.'  No  item  of  expense  seems  to  have  been  ten)  small 
or  t<x)  remote  not  to  have  been  included  in  this  calculation  of 
costs. 

The  correctness  of  the  judgment  of  those  who  fixed  the 
price  at  $2. 20  per  bushel  was  demonstrated  by  an  increased 
acreage  under  winter  wheat;  it  rose  to  42,000,000  acres,  an 
advance  of  al)out  2,000,000  acres  over  any  acreage  before 
known  in  American  history,  and  an  increase  of  7,ooo,(xx)  acres 

'  F.  \V.  Taussig,  "Price  Fixing  a§  Seen  by  a  Price  Fixer,"  Quarterly  .'ournal  of 
Economics,  February,  1919,  p.  J07. 

•  The  Literary  Digest,  Sept.  29,  1917.  p.  10. 

'  Fooil  Aciministrution,  Doubling  the  Wheat  Dollar,  p.  6. 


THK   I'NITKU  ^.TATES 


3i.\ 


mvT  prewar  av.raKo. '  The  prior  of  $3.30  wan  a  a.mr.romise 
lH-tw»H-n  S1.84  lUmandecl  |,y  \a\mr  repr.sentaiiMs  anil  $2  so 
a<lv»Hat«|  by  the  rt|)reK-ntativeH  «»f  the  farnurs. 

Ah  the  minimum  f.rice  estal.hVhed  l>y  the  hnHl  Conirnl  Act 
<li<l  not  apply  t<,  the  i*^,;  harvent.  the  I're.i.hnt  ap,Munte,l  a 
<ommittee.  elected  fn.m  the  vari..UH  pnKlucinK  Mrtionn  and 
n.nsuminK  intereMn  of  the  a.untry.  to  .letermim-  the  price  at 
whu  h  Kram  was  t.»  U-  purrha^^l  by  the  K'.vernment  U-fore 
the  ,  ..mmK  on  the  market  u(  the  I.>i8  wheat  crop.  This  n.m- 
mittiH.  was  ap,K.inte<l  on  August  15:  amonK  its  memlH-rs  were 
four  farmers,  one  capitalist,  thre..  ci.llene  profess<.r>.  one 
banker,  one  profesM.r  of  ecnomics  and  tw..  repres,ntatives 
of  lal>or.=  Mr.  H.  A.  f -.artield  was  made  the  .  hairman  of  the 
committee. 

In  a  re|H.rt  presented  on  AuRust  .v>.  1017,  the  ccmmittec 
recommended  that  the  price  of  No.  1  m.rthern  >prinK  wheat 
or  Its  ecpjivalent.  sh.uild  be  $2.20  per  bushel  at  Chicago  '  It 
based  Its  conclusions  u,M.n  the  "est  estimates  for  the  cn.p  of 
U>I7  furnished  by  the  Inited  States  Department  of  AkHcuI- 
ture.  checketl  by  the  results  <.f  independent  investinati.ms  ami 
the  evidence  submitted  to  the  committee  by  producers  and 
their  representatives."  The  time  which  intervened  between 
the  apix.intment  of  the  ommittee  and  the  presentati,.n  of  the 
report  was  so  short  that  a  painstaking  investination  by  the 
committee  of  the  cost  of  wheat  production  was  obviously  out 
of  the  question. 

Acting  upon  the  committee's  recommendation,  the  Presi- 
dent issued  an  order  establishing  the  price  for  1^17  wheat. 
According  to  this  order,  taking  $2.20  as  the  basic  price,  the 
prices  of  other  grades  in  Chicago  ranged  from  Sj.io  for  \o  i 
humpback  to  $2.24  for  No.  i  dark  hard  winter.  No.  i  dark 
northern  spring  and  No.  i  amber  durum.  Equivalent  to  No. 
I  northern  spring,  or  basic,  were  N<,.  i  hard  winter.  No.  i 
red  winter,  No.  i  durum  and  No.  i  hard  white. 

1  u'"'!if,'"'o  '""^  ^J"'""''"'  Chronicle,  .March  2.  i<,iH.  ,,  876 
\  Monthly  Rnneu- of  the  V,  X  Bureau  of  Labor  .Statist  ds^pu-mb^r  ,0,7  p   70 
I  .  S.  Food  .A.lmin.stration,  Foliaes  and  Flan  of  Operation  pp  24-2^"^'  ^ 


4 


litl!^ 


324 


PRICES   AND  PRICE  CONTROL  DURING  THE   WAR 


-n^'     '  f 


m  ■t 
■  ■    'I 

i 


Differentials  between  the  different  primary  markets  of  the 
United  States  were  established  as  follows: 

Kansas  City  and  Omaha,  5  cents  less  than  basic;  Duluth 
and  Minneapolis,  3  cents  less;  St.  Louis,  2  cents  less;  New 
Orleans  and  Galveston,  basic;  Buffalo,  5  cents  more;  Balti- 
more and  Philadelphia,  9  cents  more;  and  New  York,  10 1  ents 
more  than  the  basic'  The  prices  for  Nos.  2,  3  and  4  of  each 
grade  were  recommended  to  be,  respectively,  3,  6  and  10  cents 
less  than  basic. 

Many  unsuccessful  attempts  were  made  to  increase  the 
minimum  price  for  the  1918  crop  to  $2.50  (Senator  Gore's  bill) 
and  even  to  $2.75  (Senator  McCumber's  bill).  On  February 
20,  1918,  the  Food  .Administration  announced  that  it  would 
use  all  its  influence  to  prevent  the  enactment  of  any  price 
increasing  bill  because  the  passage  of  such  a  bill  would  upset 
its  entire  wheat  and  bread  program.' 

In  an  effort  to  force  an  increase,  an  amendment  raising  the 
price  of  wheat  to  $2.40  was  included  in  the  annual  agricultural 
appropriation  bill  for  the  fiscal  year  1918-19.  President  Wil- 
son vetoed  this  bill.  Those  who  opposed  the  higher  minimum 
argued'  that  any  such  change  would  disorganize  the  plans 
made  by  the  administration,  would  be  unjust  to  those  farmers, 
millers,  etc.,  who  had  made  contracts  on  the  established  basis, 
and  would  raise  unduly  the  price  of  flour  to  the  consumers 
(from  $10.50  to  $12.50  a  barrel).  It  was  also  pointed  out 
that  the  .Allies  were  buying  .Argentinian  wheat  at  $1.40  a 
bushel. 

The  Food  Administration's  measures  affecting  the  wheat 
trade  were  very  largely  the  result  of  recommendations  by  a 
Committee  of  Grain  E.\changes  in  Aid  and  National  Defense. 
This  committee  was  organized  in  April,  191 7,  after  consulta- 
tions between  the  Council  of  Grain  Exchanges  and  the  Secre- 
tary of  Agriculture.  The  committee  at  the  request  of  Mr. 
Hoover,  submitted  a  plan  of  action  which  in  its  opinion  would 
be  acceptable  Ixjth  to  the  government  and   to  the  trade. 

'  ifonthly  Revieu-  of  the  U.  S.  Bureau  of  Labor  Statistics,  November,  1917,  p.  80. 
'  Commercial  and  Financial  Chronicle,  February  23,  1918,  p.  771. 
'  The  New  York  Evening  Post,  December  31,  1918. 


THE   UNITED   STATES 


"5 


The  committee  expressed  itself  in  favor  of  fixing  a  wheat  price 
and  of  maintain^  -  \  lor  the  entire  crop  year  without  change; 
It  also  went  ,  .cord  as  desirous  of  governmental  control  of 
the  distribution  of  the  available  wheat  supply;  the  discontinu- 
ance of  trading  in  futures  in  wheat  on  the  grain  exchanges; 
and  the  limitation  of  the  practice  of  buying  flour  far  in  advance 
of  actual  needs.' 

The  other  body  which  helped  to  shape  the  control  of  wheat 
trade  was  the  United  States  Millers'  Committee  appointed  by 
Mr.  Hoover  on  June  22.  It'consisted  of  nine  leading  mem- 
bers of  the  flour  milling  industry,  representing  the  several  sec- 
tions of  the  country.  The  committee  reported  on  June  28  a 
plan  which  proposed  that  each  mill  should  be  entitled  to  sell 
its  products  on  a  cost  plus  profit  basis,  provided  the  cost  of 
manufacturing  and  marketing  did  not  exceed  seventy-five 
cents  per  barrel,  while  the  amount  of  profit  was  to  be  limited 
to  twenty-five  cents  per  barrel.  The  mills  agreed  to  abide  by 
the  go-  .rnment's  allocation  of  business  among  them  on  the 
basis  of  their  average  output  for  the  three  preceding  years. 
They  also  agreed  that  their  sales  of  flour  should  be  limited  to 
a  period  of  thirty  days  in  advance.  These  proposals  were 
ultimately  adopted  as  the  basis  of  milling  regulations.^ 

In  order  to  eliminate  speculation  in  wheat  and  flour,  the 
Food  Administration  adopted  the  following  measures: 

First.  It  limited  the  right  to  storage  of  wheat  and  flour 
without  the  approval  of  the  Food  Administration  to  thirty 
days. 

Second.  The  flour  mills  of  the  country  were  prohibited 
from  contracting  for  sale  of  flour  more  than  thirty  days  in 
adyancc. 

Third.  All  the  grain  exchanges  of  the  country  were  re- 
quested to  suspend  during  the  period  of  war  all  trade  in  futures 
of  every  kind.' 

One  of  the  effects  of  the  Food  Administration's  rulings  was 

veXr^S  p.  &;''"'"  """^  ^^°"'  ^™''*'"  '^"^""'y  ^""'""^  of  Economics,  No- 

*  Ibid.,  p.  9. 

•  U.  S.  Food  Administration,  Policies  and  Plan  of  Operation,  p.  i6. 


Hi! 

i 

»  : 

I  i 

I 
5 


936 


PRICES  AND   PRICE  CONTROL  DURING  THE   WAR 


the  elimination  of  the  ordinary  means  by  which  the  greater 
part  of  the  country's  grain  trade  is  financed,  i.e.,  through  the 
purchase  and  sale  of  futures.  It  became  necessary  to  use 
government  funds  for  the  purpose  of  carrying  the  movement 
of  wheat  and  to  provide  some  machinery  which  would  assume 
the  functions  of  the  normal  agencies  of  distribution.  The 
problem  was  solved  by  the  establishment  of  the  Uniced  States 
Food  Administration  Grain  Corporation. 

There  were  precedents  in  the  government  doing  business 
through  business  corporations;  such  were  for  instance  the 
Emergency  Fleet  Corporation  and  the  Panama  Railways. 
Mr.  Hoover  saw  the  advantages  of  economy,  flexibility  and 
expedition  which  lie  in  such  a  system  as  compared  with  rely- 
ing upon  the  ordinary  machinery  of  the  Treasury,  so  ill 
adapted  to  trading  operations.  Like  all  the  other  organiza- 
tions created  by  Mr.  Hoover,  the  Grain  Corporation  was  not 
bureaucratic  either  in  its  personnel  or  in  its  character. 

Some  of  the  country's  best  experts  in  the  wheat  trade  were 
made  responsible  heads  of  the  corporation.  It  opened  its 
offices  on  September  4,  191 7,  and  immediately  proceeded  to 
regulate  the  conditions  in  the  wheat  markets.  Provided  with 
$50,000,000  of  the  government  funds,  it  became  the  dominant 
purchasing  factor  all  over  the  United  States.  The  country 
was  divided  into  fourteen  zones,  each  containing  an  important 
terminal  market.  Government  representatives  who  were  large 
scale  dealers  themselves  before  the  war  were  appointed  as 
buyers.  Grain  corporation  agents  at  various  milling  centers 
acted  as  distributors  of  wheat;  they  apportioned  the  wheat  as 
it  arrivetl  at  each  center  among  the  various  mills  of  the  place 
in  accordance  to  the  needs  of  each  mill. 

The  agreement  between  the  Grain  Corporation  and  the 
flour  millers  provided  that  the  latter  should  in  purchasing 
w  heat  observe  and  be  governed  by  all  rules  and  regulations 
enacted  by  the  corporation.  The  Grain  Corporation  guaran- 
teed millers  against  losses  by  a  decline  in  value  on  all  accumu- 
lated surplus  of  unsold  wheat  bought  in  accordance  with  the 
Grain  Corporation's  regulations;  it  further  agreed  to  endeavor 


THE   UNITED   STATES 


227 


,to  maintain  in  available  positions,  an  adequate  supply  of  suit- 
able wheat  to  meet  the  milling  demands  of  the  miller  at  the 
general  price  level  of  wheat. 

On  June  21,  1918,  the  capital  stock  of  the  Food  Administra- 
tion  Gram  Corporation  was  increased  to  Si5o.ooo.(xh)      The 
purpose  <.f  the  executive  order  which  authorized  this  increase 
vvas  twofold:  first,  to  enable  the  Food  Administration  to  make 
the  necessary  readjustments  in  wheat  prices  at  guaranty  ter- 
mmals  to  cover  the  increase  in  railway  rates;  and  second   in 
view  of  the  large  harvest,  to  provide  the  Oain  Corp«,ration 
with  the  increased  capital  necessary  to  carry  out  the  guaranty 
to  the  producer.     The  intention  was  to  readjust  prices  at 
primary  markets  in  such  a  way  as  to  place  the  farmer  in  as 
nearly  as  possible  the  same  position  as  the  one  which  he 
enjoyed  prior  to  the  increase  in  freight  rates.' 

The  "fair  price"  for  "basic"  wheats  in  Chicago  was  fixed 
at  J2.26;  prices  in  the  other  markets  ranged  from  S2  18  in 
Kansas  City  and  Omaha  to  S2.39I  in  New  York.     As  in  t  e 
previous  regulations,  certain  classes  and  varieties  of  wheat 
were  dealt  in  either  at  premiums  over  or  at  discounts  under 
the  prices  for  " basic "  wheats.     The  "premium "  was  2  cents 
for  No.  r  dark  hard  winter.  No.  i  dark  northern  spring  and 
No.  I  amber  durum;  the  "discounts"  varied  from  2  cents  for 
No.  I  yellow  hard  winter  and  No.  i  soft  white  to  7  cents  for 
No.  I  red  durum  and  No.  i  red  walla.     Discounts  for  grades 
other  than  No.  i  were  fixed  at  3  cents  under  No.  i  for  No  2 
wheat  and  7  cents  under  No.   i  for  No.  3  wheat.     Grades 
lielow  No.  3  were  to  be  dealt  in  on  sample  on  merit.^ 

Two  courses  were  open  to  the  farmers:  either  to  ship  direct 
to  the  Grain  Corporation  at  any  of  the  principal  primary 
markets,  or  to  ship  to  a  commission  merchant  and  through 
him  offer  the  wheat  for  sale  in  the  open  market,  thus  securing 
the  benefit  of  competitive  buying.  The  competitive  market 
was  held  m  check  as  the  millers  agreed  not  to  pay  for  the  wheat 
a  price  in  excess  of  that  adopted  by  the  Food  Administration 


'  Official  Statement  of  the  V  S   Food  Administration,  July  6,  1918 
U.  S.  Dept.  of  Labor  Monthly  Labor  Review.  August,  1^18,  p.  358 


fh 


m 


m 
III 


8,  p.  I. 


238 


PRICES  AND   PRICE  CONTROL  DURING  THE   WAR 


for  government  purchases.  This  fixed  the  maximum  price 
offered  by  domestic  purchasers.  Export  buying  for  the 
Allies  was  concentrated  in  the  hands  of  the  Wheat  Export 
Company,  which,  as  well  as  the  buyers  representing  neutral 
nations,  acted  in  concert  with  the  Grain  Corporation.  Com- 
petition among  foreign  buyers  was  in  this  way  also  eliminated 
and  a  stabilized  price  for  foreign  purchases  assured. 

Because  the  price  of  wheat  was  reduced  below  what  it  would 
have  been  under  competitive  conditions,  it  became  relatively 
lower  than  the  price  of  other  foods,  with  the  result  that  al- 
though a  portion  of  the  population  refrained  from  eating 
wheat  in  response  to  the  Food  Administration's  appeals,  the 
total  consumption  in  the  first  part  of  1917-18  was  somewhat 
larger  than  in  1916-17.  An  unduly  large  proportion  of  the 
year's  crop  was  consumed  by  February,  1918.  The  year's 
exports  were  much  lower  than  in  the  previous  year.  It  be- 
came necessary  to  resort  to  the  use  of  wheat  substitutes.' 

The  Food  Administration  first  compelled  the  purchase  of 
other  cereals  with  wheat  flour  on  January  28,  1918,  when  the 
"50-50"  rule  '<ent  into  effect.  On  February  3,  the  first 
compulsory  baking  regulations  were  imposed  upon  the  trade. 
On  that  date  bakers  were  required  to  mix  5  per  cent  of  other 
cereals  with  their  wheat  flour;  by  February  24,  the  proportion 
of  substitutes  was  increased  to  20  per  cent.  In  April  the 
wheat  shortage  had  become  so  acute  that  the  bakers  were 
compelled  to  increase  the  use  of  substitutes  to  25  per  cent. 
These  baking  regulations,  as  well  as  the  50-50  rule,  remained 
in  force  until  August  28,  when  the  bakers  were  once  more 
allowed  to  make  a  bread  containing  only  20  per  cent  of  wheat 
substitutes  and  the  50-50  rule  was  changed  to  80-20.  On 
November  14  the  Food  Administration  suspended  all  regula- 
tions requiring  the  use  of  wheat  substitutes.^  • 

The  guaranteed  price  of  wheat  for  the  19 19  crop  has  not 
been  affected  by  the  end  of  the  war.  This  guarantee  expires 
June  I,  1920. 

'  G.  F.  Warren:  "Some  Purposes  and  Results  of  Price  Fixing,"  American  Eco- 
nomic Review  Supplement,  March,  1919,  p.  240. 

'Official  Statement  of  the  U.  S.  Food  Administration,  December  i,  1918,  p.  7. 


THE    UNITED  STATES 


aa9 


Flour 
Control  of  the  Mills 
Flour  rose  in  price  upon  the  declaration  of  the  war  in  Europe 
from  $4.49  a  barrel  in  Minneapolis,  in  June.  1914.  to  $5  51 
m  August  of  the  same  year;'  the  a  erage  prices  of  flour  for 
1914.  1915  and  1916  respectively  were  S5.09.  S6.66  and  S?  26 
as  compared  with  $4.58  for  1913.     The  pronounce!  advance 
did  not  begm  until  July.  1916;  the  quotation  rose  from  $6.10 
dunng  that  month  to  S9.82  in  November.  1917;  a  slight  de- 
cline occurred  in  December  when  the  price  dropped  to  $8.68 
I  he  average  for  the  first  quarter  of  191 7  was  S9.30.     Upon 
the  declaration  of  the  war  by  the  United  States,  flour  went 
up  to  Si  1.62  in  April  and  to  S14.88  in  May,  1917.  the  highest 
point  It  ever  reached.     When  the  government  began  its  price 
regulating  activity  in  August.   1917,   flour  was  selling   for 
»i3.o7  a  barr<!.     According  to  the  findings  of  the  Federal 
I  rade  Commission,  the  net  profits  made  by  millers  increased 
from  1 1  cents  per  barrel  in  the  crop  year.  1912-13.  to  52  cents 
per  barrel  in  the  crop  year.  1916-17.'     The  price  of  flour  went 
down   to  Si  1.26  in  September,  and  to  $10.13  in  December 
1917.  around  which  figure  flour  was  selling  during  the  first' 
halt  of  1918.  the  price  fluctuating  between  S9.52  in  May  and 
Si 0.30  m  February. 

In  order  to  carry  out  the  provisions  of  the  Food  Adminis- 
tration s  regulations  dealing  with  flour  mills  the  country  was 
diNided  into  nine  milling  divisions,  and  a  committee  of  repre- 
sentative millers  was  appointed  by  the  Food  Administration 
in  each  division.'  The  chairmen  of  the  different  divisions 
constituted  a  central  committee,  whose  headquarters  were  in 
Aew  York.  The  entire  structure  was  known  as  the  United 
States  Food  Administration  Milling  Division. 

The  millers  undertook  to  regulate  their  trade  by  voluntary 
agreement,  which  became  effective  on  September  10,   191 7. 

.9«K  S^^"""''  ^'"''''  ^"""'"  °'  ^'""""'y  P"^^  '^"""8  the  War.  November, 
4,  'i?.Tp!  7^  '*""  '"'''""''  '^''"''  C""""'**'""  °"  F'°"^  ^'i"ing  and  Jobbing.  April 
'  U.  S.  Food  Administration.  Policies  and  Plan  of  Operation,  p.  37. 


ii 


i^f 


•H 


IJ 


230 


PRICES  AND   PRICE  CONTROL  DURING  THE   WAR 


The  principal  points  of  the  agreement  were:  (i)  they  could 
not  purchase  wheat  at  a  higher  price  than  the  fair  price; 
(2)  the  Grain  Corporation  was  to  endeavor  to  supply  the  mill- 
ers with  wheat  on  the  basis  of  an  average  of  their  assessed 
capacity;  (3)  the  millers  were  to  operate  their  mills  at  a  net 
profit  not  exceeding  25  cents  a  barrel  on  flour  and  50  cents  a 
ton  on  feed  (the  latter  was  equivalent  to  about  1.7  cents  per 
barrel  of  flour  additional);  this  maximum  profit  was  based 
upon  the  needs  of  the  small  mills.'  The  Fetleral  Trade  Com- 
mission objected  to  the  regulation  of  flour  millers'  profits  at  a 
fixed  margin  above  cost  of  production,  because  such  a  method 
of  remuneration  possesses  an  inherent  weakness  of  not  encour- 
aging production  and  of  affording  to  those  unpatriotically 
inclined  a  temptation  to  dishonesty  in  cost  accounting.'  Not 
a  few  millers  .x)k  advantage  of  the  situation  and  loaded  their 
cost  reports  with  such  items  as  new  construction  and  equip- 
ment, bad  debts  of  ancient  standing,  excessive  depreciation 
charges,  losses  on  miscellaneous  outside  investments,  etc.; 
all  these  were  added  to  current  costs  of  production  and  so 
charged  to  the  consumer;'  (4)  the  millers  could  not  contract 
for  flour  more  than  30  days  in  advance;  (5)  they  could  not 
store  wheat  without  permission  of  the  Food  Administration 
for  more  than  30  days'  supply;  (6)  they  were  to  apportion 
over  the  entire  milling  trade  the  export  purchases  of  flour.* 

Inasmuch  as  a  minority  of  millers  failed  to  enter  this  agree- 
ment it  became  necessary,  both  in  protection  to  the  voluntary 
adherents,  to  the  administration  and  to  the  public,  to  legally 
license  the  entire  trade  of  a  capacity  in  excess  of  75  barrels 
per  day.  On  November  27,  191 7,  agreements  received 
showed  that  the  past  three  year  average  production  of  mills 
operating  under  voluntary  regulations  was  101,131,481  bar- 
rels out  of  a  comparative  production  of  all  mills  in  the  United 
States  of  118,000,000  barrels.     Some  of  the  results  accom- 

'  Report  of  the  Federal  Trade  Commission  on  Flour  Milling  arid  Jobbing,  April 
4,  1918,  p.  19. 

'  Ibid.,  p.  10. 

'  W.  Eldred:  "The  Wheat  and  Flour  Trade  under  Food  Administration  Con- 
trol," Quarterly  Journal  of  Economics,  November,  1018,  p.  47. 

*  U.  S.  Food  Administration,  Policies  and  Plan  of  Operation,  p.  39. 


THE   UNITED  STATES  «, 

pushed  through  the  cooperation  and  regulation  of  these  mills 
were  according  to  the  Food  Administration  • 

Basic  wheat  prices  had  been  maintained  and  observed 
throughout  the  mdustry,  and,  in  conjunction  with  the  Grain 
Corporation,  the  Milling  Division  effected  an  equitable  dis- 
tribution to  mills  of  all  available  wheat  supplies 

A  price  reduction  in  the  mill  sale  of  flour  t.K,k  place  which 

and  the  finished  product.     It  takes  approximately  4J  bushels 
o   wheat  to  make  a  barrel  of  flour.     In  reviewing  the  course 

fZ'T  °/.T  ^?*  ^""^  ''°"''  °"  *^'^  ^^''''  ^''•-  H««ver  formu- 
lated the  following  table:' 

"-'-    I  I-  li  pi  ill  ^11 
k  u  m  fill  nil  iiii 

.9K:::;:::::; ^,t    hi^    ^22    «'^    «'7.    J0.8, 

"•'-«^ •■•••■•  i-     It    ,1%    iTo    IZ      ;^ 

•  Department  of  Agriculture  figures. 
»  Since  control  mid-September. 

The  Food  Administration  also  prepared  a  chart  (page  232) 
showing  graphically  the  results  of  the  activities  of  the  Milling 
Division  from  its  establishment  to  November  4191-' 

Reduction  of  cost  to  the  consumer  was  secured  by  the 
standardization  of  flour  packages  and  the  elimination  of 
wasteful  and  costly  containers. 

The  Milling  Division  had  furnished  the  material  and  the 
rnachinery  for  the  purchase  of  all  of  the  flour  requirements  of 
the  European  Allies,  with  the  least  disturbance  of  domestic 
conditions  and  at  a  price  in  accordance  with  a  minimum 
of  expense;  it  also  materially  assisted  the  army  and  navy 
in  securing  and  distributing  adequate  supplies  of  flour 
promptly  and  advantageously. 

A  new  policy  regarding  the  milling  industry  .vas  inaugurated 

G;;;\";t1?:rf ?h'^"&„^red''^;^-^^^^^^  Co„ferenceof  the 

18 


i 


i!il 


m 


233 


PRICES  AND  PmCE   CONTROL  DURING   THE   WAR 


PRICE 

OF 

WHEAT  AND  BULK 
MINNEAPOLIS 

FLOUR  AT 

MM 

«L 

N 

i 

ISM 

> 

- 

% 

^ 

■ 

^ 

3, 

^\ 

^ 

iia 

/— 

/ 

lOiw 

qOVIRNI 

IfllT 

p*« 

I  n  PMneM  pMi  4« 

at^MUt  OF  WMJMflM- 

(rmi* 

HT   INCittMD  To   MMWiiWOtn) 

*06 

f 

■'<i 

ffi 

?isr.v 

jfr' 

>' 

«M 

•••• 

J!S 

.M 

ja"! 

^Ji 

L^i 

Nwwis  or  w» 

«ff 

'JS 

L- 

(ruiicwiiKiuDnTor' 

INMIAVeUt) 

_ 

bZwt 


AUSUST 


»      l»    <a    30     7      14     II     »    4 


SfrriMstft 


OCTOMK        NOV 


Approximately  4}  Bushels  of  Wheat  are  Required  for 
1  Barrel  of  Flour 


on  July  I,  1918.  Instead  of  a  permissible  profit  of  25  cents  a 
barrel,  millers  under  the  new  arrangement  were  allowed  to 
receive  for  the  milling  of  the  new  harvest  wheat  $1.10  a  bar- 
rel, out  of  which  they  were  to  pay  all  their  expenses.'  This 
temporary  arrangement  was  superseded  a  few  weeks  later  by 
a  plan  of  flour  and  feed  price  control  which  relieved  the  mills 
"of  the  trouble  of  calculating  prices  through  the  announce- 
ment of  a  fair  price  at  every  mill  point  in  the  T'nited  States.* 

•  Commercial  and  Financial  Chronicle,  June  29,  1918,  p.  2705. 

*  Official  Statement  of  the  U.  S.  Food  Administration,  September  12,  1918,  pp. 
lo-ii. 


THE    UNITED  STATES  g.. 

Prices  at  typical  points  for  carload  lets,  in  bulk,  at  the  mill 
were  established  as  follows:  ' 

Milling  Poinu  Flour  Bran  Mi,ed  dliS. 

Feed  Shortf. 

Boston  t  ^^  ^^ 

New  Vorlc .■■■■.■;.' ''°  ^J  *30.66  Jj,.,,  f^^f^ 

Philadelphia ! ! !  l ! .' ! ! .' ' '  "It  '^^  2^  "  "  -^^  »« 

Baltimore °  JJ  ^' ?!  •""  31  86 

Nashville.  Tenn .;: ,„  '5  fj  '^  30.91  31.66 

Atlanta.  Ga ° ^?  »7  4*  28.71  ,946 

I-ouiiville,  Ky. . . .           ,„  J^  -J]  06  3,3,  ^^  o^ 

Galveston.  Tex °  i^  f  ?^  28.51  39,6 

Buffalo.  N.Y °?^  2966  30.91  31.66 

Cleveland.  Ohio J""  »*  'f  ^9.41  30.16 

Chicago.lll ;°>"  27.76  29.01  ,9.76 

Minneapolis.  Minn \°  '*  »'  »^  26.51  27.26 

Aberdeen,  S.  Dale....  °t.  '•' ^^  ''»^'  »5  36 

WichiU.Kans '  ^|  '995  21.20  aT.95 

Fort  VVarth.  Tex '  ??  11*}.  20.66  21.4, 

Omaha.  Nebr „  i*  "  **  29.91  30.66 

Kansas  City.  Mo. . .  2  a?  "^5  2351  24.26 

St. Louis. ivio...:.;;; ,if^     ".26     23.51     2I26 

Indianapolis.  Ind .: '•       I"??         ?<  |6         25.71  ,3.46 

Denver.  Colo '°'l  ?^86  28.11  28.86 

Little  Rock.  Ark ■.■:::.■;::•    m     n^i     'f '7     18.92 

Detroit.  Mich '  °?  '^  76  28.01  28.76 

Sioux  City.  Iowa '°-^i  'J*^  28.71  29.46 

Oklahoma  City,  OkU Hi  "^  22.81  23.56 

Minot.N.Dak.   .                 '  *5  *^  ^  27.91  28.66 

Kalispell.  Mont '  °'  J'^  20.94  21.69 

Memphis,  Tenn ' ^|  '7  32  18.57  ,9.32 

Spartanburg.  S.  C ,„  2!  *^'»!  27.71  28.46 

djrie.ton7w.va... ..::::;:;:••   11 A     ll\t     3351     34.26 

Albuquerque.  N.  Mex Jole  ««  ^' ^  20.36 

^■""•o- :.    Ifs     I'tM     It:^     «j5 

These  prices  were  not  fixed  prices,  but  were  figures  named  as 
maximums  at  which  it  was  considered  "fair"  by  the  Food 
Admm.strat.on  that  sales  be  made.  It  was  expected  tS 
compet.t.on  wou  d  result  in  many  sales  being  made  at  uilder 
these  figures.  Margms  over  and  above  the  carload  cash  or 
draft  bas.s,  were  spec.fied  and  limited ;  they  averaged  approxi- 
mately 55  cents  where  flour  was  packed  in  No.  98  orSTer 
sacks;  the  cost  of  small  containers  ran  proportionately  higher 
go.ng  up  as  high  as  $2.40  per  barrel  over  the  bulk  price  where 
flour  was  sh.pped  in  No.  2  packages. 

In  the  early  part  of  December  the  Food  Administration 
announced  the  cancellation  of  all  flour  milling  regulations. 


Hi 


334 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


including  fair  price  schedules  and  price  and  quantity  restric- 
tions on  sale  of  wheat  flour  by  millers.' 

CoHtr<d  of  Wholesaling  and  Retailing 

The  control  of  flour  wholesalers  and  flour  jobbers  was 
covered  by  the  Presidential  Proclamation  of  October  i ,  which 
placed  the  dealers  in  flour  under  license.  Like  the  distribu- 
tors of  other  necessaries,  they  were  limited  in  their  charges 
to  a  price  which  would  give  them  a  reasonable  maigin  over 
cost  without  regard  to  the  market  or  replacement  value  of  the 
commodity.  This  margin  was  not  to  be  greater  than  that 
which  they  had  normally  enjoyed  in  the  prewar  period.* 
The  Food  Administration  acknowledged  that  the  departure 
from  the  market  or  replacement  value  was  a  radical  one,  but 
it  deemed  it  necessary  to  resort  to  it  because  of  shortage  of 
supplies,  the  vast  export  demand  and  the  constantly  increas- 
ing home  demand. 

The  licensees  were  required  to  keep  the  flour  moving  to  the 
consumer  in  as  direct  a  line  as  possible  and  without  unreason- 
able delay;  this  was  done  in  order  to  prevent  resales  within 
the  trade  which  tend  to  increase  the  price  to  the  retailer  or 
the  consumer. 

In  order  to  pre\'ent  speculation  and  hoarding,  licensees 
were  strictly  limited  to  a  30  days'  supply.  Moreover,  they 
were  forbidden  to  sell  to  any  person,  licensed  or  unlicensed,  if 
the  sale  was  to  give  such  person  more  than  a  thirty  days' 
supply. 

According  to  the  findings  of  the  Federal  Trade  Commission, 
the  gross  profits  of  the  car  lot  distributors  increased  from  22 
cents  per  barrel  in  the  calendar  year  19 14  to  54.4  cents  per 
barrel  in  the  first  half  of  the  calendar  year  1 91 7.  As  the  ex- 
penses, exclusive  of  salaries,  advanced  only  from  10  cents  to 
13.5  centf ,  the  net  profits  per  barrel  rose  from  18  cents  to  41 
cents  and  the  rate  of  profit  on  investment  increased  from  31.5 
per  cent  to  60.7  per  cent.'     The  gross  prol  ts  of  small  lot 

•  Industrial  News  Survey,  December  16-23.  »9l8,  p.  7. 

•  U.  S.  Food  Administration,  Policies  and       n  of  Operation,  p.  45. 

•  Report  of  the  Federal  Trade  Commissioi.    .1  Flour  Milling  and  Jobbing,  pp. 
7,18. 


THE   VNITRD  ST  ATM 


335 


jobbers  increased  during  the  «ame  pericxl  from  5^  cents  per 

nTh  Tet  'r"r  '"^  •""■'-'•  *'"^''  -Pre-nt«Un  :3  an":: 
at  ornfiT  "^  *'  ^"""  V  ''"'"  *"  ^75  cents  ami  in  the  rate 
of  profit  on  investment  from  26.2  per  cent  to  51.9  per  cent.' 

iob JrsU  r.'"'*    ?''T'  '^'  '"**•'""'"  «"'''•'*  P'-^fi*  '>f  ^«r  lot 
jobbers  at  from  50  to  75  cents  per  barrel.     These  were  groL 

could  by  efficient  operation.'  ^ 

Retailers  were  allowed  margins  of  80  cents  to  Si. 20  cents 
per  barrel  over  cost.' 

ber^r.orllf  '^"'"^'«"^'  *»"'^h  became  effective  Novem- 
ber 4,  1918,  allowed  maximum  margins  on  sales  by  whole- 
•alers  to  retailers  equal  to  60-90  cents  per  barrel 

annoT  **!M'«"'"«  "!  *'?^  ^^'"'''t'^P  the  F.xxl  Administration 
announced    hat  regulations  restricting  margins  of  profit  on 
flour  and  mill  feeds  and  regulations  prohibiting  profiteering 
hoard.„g  and  unfair  practices  were  to  remain  fn'^.ffet  until' 
the  signing  of  the  treaty  of  peace.* 

Bread 

.  clnf  *'''7^f  '■'*^''  P"'"  "^  ^  P°""^  '"^f  "^  ^«a<'  rose  from 
5  cents  on  July  15,  1914,  to  6.4  cents  on  November  ,5.  ,9,4. 
the  subsequent  adv-ances  brought  the  price  of  the  pound  loa/ 
on  November  .5.  of  .9.5.  1916.  1917  and  ,918  to  7  cents  8  4 
cents  9.9  cents  and  9.8  cents  respectively..  Thus  at  the  ime 
of  the  signing  of  the  armistice  the  price  of  bread  was  about 

o^Z  'T.  '"^  ''  '''""  '! ''"^  ^^^"  J"«^  ^f"^^  the  outbreak 
ot  ,.ar.  The  increase  in  the  price  in  many  localities  was  much 
greater  than  the  general  average  indicates 

When  the  Food  Administration  was  organized  it  placed  the 

control  over  the  production  and  distribution  of  bread  in  the 

hands  of  a  Baking  Division.     The  latter  took  steps  almost 

.mmediately  to  standardize  baker's  bread.  b<.th  from  the  stTnd- 

•  ?Xp.1a  '  ""''"'  '■"'^'  Commi»ion  on  Flour  .Milling  and  Jobbing  p.  7. 

Monthly  Labor  Review,  January.  1919,  p  89. 


lll'l 


M 


I 


asfi 


PRICES  AND  PRICE  CONTRuL  Dl  K  i  '  w  THE   WAR 


point  of  weight  and  of  the  ingrediivn  •  t-«d  in  the  baking. 
The  object  of  standardization  was  to  r  u«  c  the  cost  of  public 
baking  and  distribution,  to  rcfh^-e  thi  v.'a^tr>  of  flour  and  to 
limit  the  use  of  sugar  and  lard  in  the  prcii  nation  of  Imkery 


I' 


t'.l  4 

K'lt 


l.|. 


as  fixed  atone 
ounds.  Prcvi- 
vv  eights  on  the 


ik.IV 


111." 


I'hution  in  this 
'  y  the  e.ocery- 
,  .Mi'  •-■  •  -K 
t  ...  illUsl 
ii  I  on  cents 
.'istribution 
.i^ker  who 


bread.'  The  minimum  weight  of  a 
pound :  larger  loaves  could  weigh  I },  . 
ous  to  this  ruling  there  were  38  >Ji 
market. 

The  most  prevalent  system  of  bi  , 
country  before  the  war  was  the  sale  ■  ' 
man,  who  delivered  it  and  charged  f  u 
obtained  the  bread  from  a  wholcfni,' 
distributed  had  cost  the  consumer  inj  < 
per  pound.  The  other  less  expensive  ysten.-'i 
were  the  "cash  and  carry"  stores  an<i  the  s.  \:. 
delivered  his  own  product  directly  to  the  cousuniei  It  was 
anticipated  by  the  Food  Administration  (an  anticipation  that 
did  not  materialize)  that  "cash  an<l  carry"  grocery  stores 
conducting  their  own  bakeries  would  sell  the  one  pound  loaf 
for  alx)Ut  7  cents. 

In  New  York  the  Federal  Food  Board  on  March  20,  1918, 
after  a  series  of  conferences  with  representatives  of  the  baking 
industries,  authorized  a  price  for  the  1 6  ounce  loaf,  unwrapped, 
of  8  cents  wholesale  and  9  cents  retail  and  wrapped,  8j  cents 
wholesale  and  10  cents  retail.  On  September  20,  1918,  a 
notice  was  sent  to  all  Federal  Food  .Administrators,  stating 
that  an  investigation  by  tl:e  Baking  Division  of  manufactur- 
ing cost  and  wholesale  and  retail  prices  of  bread  warranted 
establishing  a  maximum  retail  price  for  a  one  jjound  loaf  at 
10  cents  and  a  o"e  and  half  pound  loaf  at  15  cents.  These 
were  maximum  prices  to  be  enforced  in  each  State  and  to 
apply  to  either  cash  and  carry  or  credit  and  delivery  sales. 
The  investigation  showed  wholesale  prices  of  8  and  12  cents  in 
many  sections.  These  wholesale  prices  warranted  a  retail 
price  of  9  cents  for  the  pound  loaf  and  14  cents  for  the  pound 
and  a  half  loaf,  cash  and  carry. ^ 


'  U.  S.  Food  Administration,  Policies  and  Plan  of  Operation,  p.  49. 

« U.  S.  Food  Administration  Official  Statements,  October  i,  1918,  p.  17. 


CHAPTER  V 

Sugar 

The  almormal  conditions  in  the  American  siiKar  intlustry 
which  prtva.letl  from  the  UKinning  of  the  ^reat  war  were  due 
largely  to  the  destruction  of  man>  European  k-et  tu  Ids  and 
fact.,ries.  the  prtxJuctit.n  in  Europe  having  decliniKi  from 
H.J79.0K,  tons  m  i.  ,.v«4.  to  7.5H3.215  in  1914-15.  5.o77.7^^. 
•n  I9f.s-l<.  and  4555,407  i'l  1916  17'  According  to  the 
statement  of  the  F.kkI  Administration,  sug-.r  iH-ct  pr.nluction 
has  dechned  m  all  the  Euro,H-an  sugar  pnKlucing  countries 
as  follows.' 

•^"""•■T  Equivalent  in  s,  .,rt  Torn 

Germanv  IQI?"*      1916-17       1,15-16       1914-13 

A™,™.t„„::::.:    ::  :::  •f.z  \SZ  :S;^  ■:^:Z 

s^fc  .  .  •  li  ;«  «?-  s.r 

Denmark '.'.'. \i,'?^         V'^       '■♦S"™'       '^'"^ 

Other  Countriet.......;; l*''^       ['4'°^       «38««>        '6«,ooo 

"°-ooo       »75.ooo       .?3o,ooo       404,000 

^°**''' 4.49«,ooo    5,424,000    5,699,000    8.466,0^ 

The  situation  was  aggravated  by  a  gradual  elimination  of 
distant  areas  as  sources  of  supply,  the  lack  «,f  trans,x,rtation 
lacihties  making,  for  instance,  the  enormous  tonnage  of  Javan 
sugar  ima\ailable  for  Eun.pean  and  American  consumers. 

It  should  Ik-  noted  in  this  connec  tion  thai  the  larj;  st  im- 
porter of  sugar,  the  United  Kingdom,  received  k-fore  he  war 
.54-'  per  c  ent  of  her  sugar  supply  from  Germany  and  \n-tria- 
Hungary^  and  that  France  and  Italy,  which  before  rh.  wa- 
obtained  most  of  their  sugar  from  their  home  i.nxiu.  lion 

Su'gfrR^fi^rnVco'ljs"'*"    '''"*"•    '''"""^y^^'ober.    ,„r,    The    A„.„.„ 
• /^i".:l?tSri?  %\^,t,''^  Adn.inis.ra,io„,  December         ..8,  p.  .., 

237 


11^ 


,! 


II, 


I' 


ajS  PRICES  AND  PRICE  CONTROL   DURING  THE  WAR 

were  forced  during  the  war  period  to  rely  upon  importations 
in  order  to  cover  the  major  part  of  their  needs. 

The  Cuban  market,  which  prior  to  the  war  had  been  almost 
the  exclusive  field  of  the  United  States  refiners,  became  the 
center  of  a  feverish  purchasing  activity  on  the  part  of  the 
Allied  governments  and  of  neutrals.  The  quantity  of  sugar 
imported  into  the  United  Kingdom  and  the  continent  of 
Europe  increased  from  304,565  tons  in  1913-14  to  730,993 
tons  in  1915-16.*  To  what  extent  the  Allies  depended  through 
191 7  and  1 91 8  for  their  sugar  upon  Cuba  and  the  United 
States  may  be  seen  from  the  following  table  :* 

Prewar  An- 
nual Average  1917  •1918 
(1909-13) 
Exports  of  unrefined  sugar  from: 

Cuba I43.834  956,765  1,300,000 

Hawaii ....  ....  30,000 

Philippines 56,785  

Exports  of  refined  sugar  from  the 
United  Sutes a3.i67  364,167  150,000 

*  Estimated  in  September,  1918. 

Just  before  the  outbreak  of  the  great  war  sugar  was  selling 
in  the  United  States  at  a  lower  figure  than  it  had  been  for 
many  years.  Average  yearly  wholesale  and  retail  prices  for 
granulated  sugar  were:  * 

Wholesale  Prices  Average  Retail  Price 

In  1911 5.33  per  pound        6.10  per  pound 

;;  «9i» 505    "       •'  6.30    "       " 

«9i3 4a7    "       "  550    "       " 

1914 4-71     "       "  5.90    "       " 

Sugar  wasquoted  onlyalittleabove$4.oo  per  100  poundsin  New 
York  when  the  war  broke  out.  Within  a  month  it  had  risen 
to  $7.10,  from  which  height  it  soon  temporarily  fell;  the  aver- 
age wholesale  price  for  1915  was  $5.56  and  for  1916,  $6.88.  In 
April,  1917,  the  price  was  $8.14,  as  compared  with  $3.67  dur- 
ing the  same  month  in  1914;  in  August,  1917,  it  went  up  to 
$9.75;  the  retail  price  at  the  same  time  reached  in  some  places 
20  to  25  cents  a  pound.     Mr.  Hoover's  efforts  to  control  the 

•  Conditions  in  the  Sugar  Market,  January-October,  igi7,  pp.  I»-I3. 

•  Official  Statement  of  the  U.  S.  Food  Administration,  September  12,  1918,  p.  9. 

•  The  World's  Sugar  Supply,  National  Bank  of  Commerce  in  New  York,  p.  38. 


THE   UNITED  STATES 


239 


supply  and  to  stabilize  the  price  of  sugar  began  almost  from 
the  very  first  days  of  his  appointment  to  the  office  of  Food 
Administrator,  on  August  lo,  19,7.     The  legislature  did  not 
give  h.m  power  to  fix  prices  directly  or  to  pun  hase  sugar,  but 
he  could  declare  profits  extortionate  and  could  revoke  licenses 
of   those   who,   according  to   him.   violated   the   law      Mr 
Hfx>ver  adopted  the  plan  of  entering  into  voluntary  agree- 
ments with  producers  regarding  maximum  prices  and  m.-.rgins 
On  August  15  he  named  George  M.  Ralph  as  chief  of  the  Sugar 
D.v,s^n  of  the  Food  Administration.     On  August   ,6  fhe 
New  York  Coffee  and  Sugar  Exchange  at  Mr.  Hoover's  sug! 
gesfon  suspended  all  trading  in  sugar  for  future  delivery 
and  shortly  thereafter  the  beet  sugar  refiners  were  summoned 
to  Washington.'     A  number  of  meetings  wero  held,  at  which 
the  representatives  of  the  domestic  beet  sugar  industry  agreed 

Ihn!  H      '9.'7-'«.<^'-«P  o(  beet  sugar  at  $7.25  cane  basis, 
seaboard  refining  points. 

I'nder  this  arrangement  the  price  paid  for  beet  sugar  in  the 
nterior  of  the  country  was  equal  to  S7.25.  plus  the  cost  of 

fZTJ  °?  T  'u^  "^^'■"'*  '^^^''''''^  '■^fi"*^'-y.-  the  further 
from  the  seaboard  the  sugar  was  s.  „|  the  higher  was  the 
price;  this  was  in  conformity  to  the  practice  before  the  war 
beet  sugar  always  having  been  sold  at  interior  points  a.  prices 
to  meet  the  competition  of  imported  sugars,  rather  than  in 
relation  to  the  cost  of  production  = 

According  to  Mr.  Hoover's  statement,  the  basic  price  of 
$7.25  was  arrived  at  after  the  examination  of  costs  in  various 
factories;  the  cost  was  found  to  range  from  S4.00  to  S7.00  per 
100  pounds  and  the  price  agreed  upon  was  such  as  to  permit 
the  highest  cost  producer  to  continue  in  business,  thus  assuring 
the  maintenance  of  a  maximum  production.  On  Decemter 
12  the  price  was  changed  to  $7.35;  this  change  was  made  in 
order  to  bring  the  price  of  beet  sugar  in  greater  conformity 
with  the  cane  basis,  as  established  by  an  agreement  with 

cial  ChronicU,  March  2   10,8  d  8-6      ^     '  ^  '     '    •^''°  <'0""<^'»<^  ""^  finan- 
'  tkid:  op.  cit.,  p.  S75.  ' 


m 


ill 


340 


PRICES  AND   PRICE  CONTROL  DURING  THE  WAR 


Cuban  producers.  The  price  was  raised  to  $7.45  on  January 
8,  1918,  and  again  in  the  latter  part  of  June  to  $7.50.' 

The  distribution  of  beet  sugar  was  entrusted  to  a  Sugar 
Distributing  Committee  appointed  by  Mr.  Hoover;  this  com- 
mittee was  composed  of  representatives  of  beet  sugar  pro- 
ducers and  brokers  of  the  beet  sugar  territory  of  the  United 
States.  Local  representatives  of  this  central  organization 
were  established  at  many  points  throughout  the  country; 
they  allocated  the  sugar  to  dealers  and  saw  to  it  that  govern- 
ment regulations  were  complied  with.  Sugar  was  shipped  to 
dealers  from  the  nearest  factory.  All  those  engaged  in  the 
business  of  importing  sugar,  of  manufacturing  sugar  from 
sugar  cane  or  beets  or  of  refining  sugar  were  required  to  secure 
on  or  befote  October  i,  191 7,  a  license.' 

Shortly  after  an  agreement  was  reached  with  beet  sugar 
factories,  steps  were  taken  to  bring  under  control  all  other 
sugar  interests.  On  Septembr  21,  1917,  the  International 
Sugar  Committee  was  created,  which  included  the  representa- 
tives of  England,  France,  Italy  and  Canada,  as  well  as  of  the 
United  States.  An  international  agreement  was  necessary 
in  order  to  deal  with  the  Cuban  situation.  The  committee 
took  charge  of  the  buying  and  transportation  of  Cuban  sugar 
to  the  Allies,  the  neutrals  and  the  American  cane  sugar  refin- 
ers. The  sugar  set  aside  for  the  United  States  was  allotted 
to  the  refiners  by  the  American  Refiners'  Committee,  com- 
posed of  refiners  and  their  sales  agents.  The  subsequent  dis- 
tribution of  cane  sugar  was  left  in  the  hands  of  the  Food 
Administration.  At  the  time  of  the  appointment  of  the 
International  Committee,  the  amount  of  unsold  Cuban  sugar 
was  very  small,  not  over  50,000  tons.  In  an  effort  to  keep 
down  the  price  for  the  191 7-1 8  crop,  concerning  which  the 
Food  Administration  was  then  negotiating  with  Cuban  pro- 
ducers, the  committee  requested  the  American  refiners  to 
keep  out  of  the  Cuban  market.  The  committee  itself  did  not 
go  in  its  offers  to  producers  beyond  $6.90  per  100  pounds, 

'  U.  S.  Food  Administration,  Proclamations  and  Extcutivt  Orders  by  the  Presi- 
dent, p.  7. 
*  Industrial  News  Survey,  July  i-8,  1918,  p.  5. 


THE   UNITED  STATES 


241 


delivered  at  Xew  York;  this  was  about  $1.00  below  the  maxi- 
mum  price  reached   in  August.     While  negotiations  were 
pendmg,  some  of  the  eastern  refiners  in  Atlantic  coast  towns 
had  to  close  down  for  lack  of  raw  sugar.     There  was  also 
a  lack  of  refined  sugar  and  in  man>-  places  people  were 
obliged  to  pay  12  to  15  cents  a  pound  or  more.'    As  a  result, 
an  investigation  into  the  shortage  of  sugar  was  instituted  by 
the  Senate.     During  the  hearings  before  the  Investigating 
Committee  in  December,  1917.  accusations  were  made  by 
Mr.  Claus  A.  Spreckels  that  the  shortage  of  sugar  was  due 
to  Mr.  Hoover  forbidding    the  purchase  of  raw  material 
at  a  price  higher  than  the  one  fi.xed  by  the  Sugar  Committee; 
It  was  also  charged  that  by  announcing  a  prospective  sugar 
shortage  Mr.  Hoover  had  caused  a  panic  among  consumers, 
with  a  subsequent  hoarding  of  the  staple,  and  that  therefore 
he  himself  was  partially  responsible  for  the  shortage.   The 
Investigating  Committee,  under  the  chairmanship  of  Senator 
Reed,  seemed  to  be  very  reluctant  in  admitting  Mr.  Hoover's 
statement  in  defense  of  his  position.    The  publication  of  this 
statement  was  authorized  by  the  President  without  the  per- 
mission of  Senator  Reed's  Committee.     In  his  reply  to  the 
critics,  Mr.  Hoover  attributed  the  shortage  in  the  United 
States  to  th     heavy  movement  of  sugar  from  the  western 
hemisphere  to  Europe.     While  before  the  war  the  exports 
from  this  hemisphere  to  the  Allies  were  only  about  300000 
tons  annually,  the  exports  to  them   in   191 7  were  alwut 
1,400,000  tons;  but  for  this  fact,  according  to  Mr.  Hoover 
there  would  not  have  been  any  shortage. 

A  certain  admission  that  the  shortage  of  sugar  in  the  east 
was  due  at  least  in  part  to  price  regulations  was  made  by  the 
tood  Administration  when  it  raised  the  price  of  beet  sugar  to 
»8.r5.  Committed  to  a  definite  price  and  assured  of  this 
price  all  the  year  round,  the  beet  sugar  factories  were  not 
shipping  sugar  to  the  Atlantic  seaboard  as  they  ordinarily 
would  have  done  in  case  of  a  shortage  there. 
Furthermore,  the  Atlantic  coast  received  much  less  Louisiana 

>  Commercial  and  Financial  Chronicle,  March  2,  1918,  p.  876. 


^m 


343 


PRICES   AND  PRICE   CONTROL  DURING  THE  WAR 


lii 


sugar  than  usual.  This  was  due  to  several  causes:  first,  the 
prices  set  enabled  the  Lnnisiana  producers  to  dispose  of  their 
sugar  to  better  advantage  by  clarifying  and  washing  it  on  their 
plantations  and  by  seSHng  it  in  their  own  State  to  the  manu- 
facturers of  confections  than  by  shipping  it  to  the  Atlantic 
seaboard  refiners;  second,  a  part  of  the  Louisiana  crop  was 
damaged  by  frost;  third,  a  larger  amount  of  the  Louisiana 
sugar  than  contemplated  was  exported  to  the  Allies.' 

During  the  negotiations  for  the  1917-18  crop,  the  Cuban 
representatives  held  out  for  $5.25  f.  o.  b.  Cuban  ports,  while 
the  American  representatives  were  in  favor  of  paying  $4.50; 
the  average  cost  of  production  was  found  to  be  53.38.  After 
lengthy  negotiations,  the  deal  was  finally  closed  at  $4.50 
f.  o.  b.  Cuban  ports  plus  30  cents  per  hundredweight  for 
freight.'  This  price,  like  the  one  agreed  upon  in  the  case  of 
beet  sugar  and  also  of  the  Louisiana  cane  sugar  (the  price  of 
which  was  fixed  at  $6.35  f.  o.  b.  New  Orleans  was  sufficiently 
high  not  only  to  give  a  good  profit  to  average  producers,  but 
also  to  keep  in  business  most  of  the  highest  cost  producers. 

Sugar  refiners  agreed  to  work  for  a  differential  of  $1.30  per 
100  pounds;  before  October  i,  1917,  the  differential  was  $1.60 
to  $2.05.'  The  figure  of  $1.30  was  arrived  at  by  taking  the 
average  margin  for  five  years  previous  to  and  including  1914 
and  addinp'  the  increased  cost  of  operation  which  refiners  had 
to  face.*  The  amount  agreed  upon  included  the  brokerage 
of  3  to  5  cents  which  refiners  pay  agents  for  selling  their  sugar 
to  wholesalers.  As  to  the  latter,  they  were  limited  in  all  their 
dealings  to  their  prewar  normal  profits,  which  they  inter- 
preted to  mean  in  the  case  of  sugar  as  25  cents  a  hundred 
pounds.  Retailers  were  kept  within  the  limits  of  reasonable 
prices  through  fear  of  having  their  supply  of  sugar  cut  off  by 
the  jobbers  as  well  as  through  their  desire  to  live  up  to  the 
rulings  of  the  Food  Administration. 

'  R.  G.  Blackey:  "Sugar  Prices  and  nistribution  under  Food  Control,"  Quaf' 
lerly  Journal  of  Economics,  August,  1918,  p.  590. 

•  Commercial  and  Financial  chronicle,  ^larch  3,  1918,  p.  876. 
•/Wrf.,  June  27,  1918,  p.  2611. 

*  U.  S.  Bureau  of  Labor,  Monthly  Labor  Review,  November,  1917,  p.  82. 


THE    IMTED  STATES 


243 


hJ^^J,f''"u''^  l!  '"^""^^""'■^•■s  "Sing  sugar  b^gan  in  Octo- 
oer,  1917,  when  those  producing  nonessentials  were  hmited  to 
50  per  cent  of  their  normal  requirements.     A   subsequent 
ru  .ng  d,rected  that  manufacturers  of  n<,nessentia!s  sTting 
after  Apnl   ,     ,9,8.  should  be  allotted  no  sugar  whatever 
There  was  no  definite  rationing  of  consumers  until  the  middle 
of  1918.     Previous  to  th.s  date,  requests  had  been  made  that 
the  consumers  curtail  their  consumption  of  sugar  voluntarily. 
The  War  Emergency  Food  Sur%ey  of  August  31,  1917  so  far 
as  It  related  to  sugar,  showed  that  the  amoun't  ii  su^r "on 
sumed  m  the  United  States  for  the  year  ending  August  31 
191 7.  was  approximately  9,100,000.000  or  88.3  pounds  oer 
capita,  as  compared  with  an  average  annual  consumption  of 
the  five  year  penod  ending  in  1916  of  8.300.000.000  or  84  7 
pounds  per  capita.'     In  view  of  the  shortage,  the  Food  Ad- 
ministration suggested  at  first  that  the  consumption  of  sugar 
be  cut  to  67  pounds  per  person,  but  it  soon  realized  that  such 
a  consumption  could  not  be  maintained. 

On  June  24.  1918.  Mr.  Hoover  issued  a  statement  acknowi- 
edging  that  the  ^ugar  situation  was  more  difficult  than  the 
Food  Administration  anticipated  at  the  beginning  of  the  year 

n^J'Z.  T  t  ''"^'."'  '^'  ^'■'^^"'^y-  fi^«^-  i""-^«ed  ship-' 
ping  needed  by  the  growing  American  army  in  France  which 
necessitated   the   curtailment  of  sugar   transportatTon    not 

rSl  \TT  "'^'^^'''  ''"*  '''"  ''■«'"  Cuba;  second,  the 

smaller  yield  than  was  expected  from  the  accessible  sugar 
producing  areas,  such  as  certain  West  Indian  Islands,  as  well 
as  from  the  domestic  beet  sugar  fields  and  from  Louisiana; 
third,  the  destruction  of  a  number  of  beet  sugar  factories  in 
the  battle  areas  of  France  and  Italy;  fourth,  the  s  nking  of  a 
considerable  amount  of  sugar  by  submarines.' 

The  refiners'  reserve  stocks,  which  are  in  normal  times  used 

o  bridge  the  gap  in  the  eastern  part  of  the  country  between 

the  end  of  the  arrivals  of  cane  sugar  from  outside  and  the 

^  M;.  S.  Dept.  of  Agriculture.  Circular  Xo.  96.  Sugar  Supply  of  the  United  States. 

«  U.  S.  Bureau  of  Labor.  Monthly  Labor  Review.  August.  1918,  p.  139. 


k'^ 


(if 


a44 


PRICES   ASV  PRICE  CONTROL   DURING  THE   WAR 


arrivals  of  beet  sugar  from  the  Western  States,  dropped  in 
August  to  about  40  per  cent  of  the  normal  reserve  supply. 
The  chart  compares  the  movement  of  refiners'  stocks  of  raw 
sugar  in  1918  with  the  preceding  year  and  with  the  prewar 
average.' 

REFINERS'  STOCKS  OF  RAW  SUGAR 

U"  lomt  lent  of  1,140  pounds  iack\ 


Jan.    Fab.     March    April     May      June     Ju)^     Au$.     .Stff. 


'  Official  Statement  of  the  U.  S.  Food  Administration,  September  12,   1918, 
pp.  9-10. 


THE   UNITED   STATES 


245 


A  reduction  in  the  consumption  of  sugar  in  the  United  States 
was  declared  to  be  a  necessity,  as  only  i  .600.000  tons  of  sugar 
were  to  be  available  for  distribution  in  the  country  until  the 
end  of  the  year.  According  to  regulations,  which  became 
effective  on  July  i.  the  householders  were  limited  to  3  pounds 
of  sugar  per  month  per  person,  with  a  special  allowance  of  2S 
pounds  of  sugar  for  home  canning  puq^jses.  This  meant  a 
reduction  of  some  25  per  cent  from  normal  consumption,  but. 
as  the  Food  Administration  remarked,  it  was  still  nearly 
double  the  ration  in  the  Allied  countries  and  was  ample  for 
every  economical  use. 

In  order  to  secure  justice  in  distribution  and  to  make  the 
restrictive  p  ans  as  effective  as  possible,  no  manufacturer  or 
wholesaler  of  sugar  was  allowed  after  July  i  to  sell  any  sugar 
except  to  buyers  who  secured  a  certificate  from  the  local  food 
administrators  indicating  the  quantity  they  were  allowed  to 
buy.     The  users  of  sugar  were  divided  into  five  classes- 

A.  Candy  makers,  soft  drink,  chocolate  and  cocoa  manu- 
manufacturers,  tobacco  manufacturers,  makers  of  flavorine 
extracts,  syrups,  sweet  pickles,  etc. 

B.  Commercial  canners  of  vegetables,   fruits  and   milk 
makers  of  drugs,  explosives,  etc. 

C.  Public  eating  places,  as  hotels,  restaurants,  boarding 
houses,  dining  cars,  boats,  clubs,  etc. 

D.  Manufacturers  of  all  bakery  products. 

E.  Retailers  and  others  selling  for  direct  consumption.' 
tach  class  was  entitled  to  a  certain  allotment  of  sugar  for 

the  months  of  July,  August  and  September,  1918,  the  allot- 
ment varying  from  50  per  cent  of  the  amount  of  sugar  they 
used  in  the  corresponding  months  of  1917  (Cla.ss  A)  to  all  the 
sugar  that  the  manufacturers  required  (Class  B). 

No  sugar  was  allowed  to  leather  tanners  and  to  manufac- 
turers of  nonedibles. 

On  July  13,  1918,  at  the  direction  of  the  President    the 
Lnited  States  Sugar  Equalization  Board  was  formed  for  the 
purpose  of  better  controlling  distribution  and  prices  of  sugar. 
'  U.  S.  Department  of  Labor.  Monthly  Labor  Review,  pp.  139-140. 


i 


2^6 


PRICES  AND   PRICE   CONTROL  DURING  THE  WAR 


The  board  was  empowered  to  purchase,  manufacture,  sell, 
store  and  handle  raw  and  refined  cane  and  beet  sugar,  syrups 
and  molasses.'  The  Equalization  Board  entered  into  an 
agreement  with  Cuban  sugar  producers  and  became  the  sole 
American  purchaser  of  Cuban  sugar  at  fixed  prices.  In  191 7, 
48  per  cent  of  the  sugar  supply  of  the  United  States  came  from 
Cuba;  in  1916,  out  of  a  total  consumption  in  the  United 
States  of  3,658,607  tons,  1,666,548  tons  were  supplied  by 
Cuba,  and  in  1915  the  proportion  was:  total  consumption, 
3i8oi,53l,  imports  from  Cuba,  1,841,603.*  The  government 
expected  by  controlling  the  Cuban  supply  to  have  an  effective 
grip  on  the  sugar  industry  of  the  country.  The  American 
refiners  of  Cuban  sugar  agreed  to  buy  raw  sugar  exclusively 
from  the  board  at  fixed  prices. 

Toward  the  middle  of  1918  the  sugar  refining  companies 
applied  for  an  increased  differential  for  refining,  claiming  that 
increased  cost  of  labor  and  supplies  rendered  margins  deter- 
mined upon  in  October,  1917,  inadequate.  A  committee 
appointed  to  investigate  refining  costs  reported  that  an  in- 
creased margin  was  justifiable  and  it  was  raised  in  September, 
1918,  from  $1.30  a  hundred  pounds  to  $1.45.  At  the  same 
time  the  cane  sugar  wholesale  price  was  fixed  by  the  Equaliza- 
tion Board  at  9  cents  a  pound,  f.  o.  b.  seaboard  refining 
points.'  Wholesalers  and  retailers  were  to  sell  on  the  old 
basis  until  the  exhaustion  of  their  stocks  of  lower  priced  sugar. 
The  price  was  raised  again  in  December,  191 8 — this  time  to 
10  cents  a  pound.* 

In  view  of  a  continued  shortage  of  sugar  the  per  capita  con- 
sumption of  sugar  was  cut  from  3  pounds  to  2  pounds  per 
month,  the  reduction  to  remain  in  force  from  August  i  to 
January  i.  Other  changes  in  the  sugar  regulations  were  the 
increase  of  the  wholesalers'  margin  from  25  cents  to  35  cents 
per  100  pounds,  and  the  raise  in  the  New  York  price  of  Ci  ban 

*  U.  S.  Food  Administration,  Proclamations  and  Executive  Orders  by  the 
President,  p.  30. 

»  Conditions  in  the  Sugar  Market,  January-October,  1917,  The  American  Sugar 
Refining  Co.,  p.  to. 

*  Commercial  and  Financial  Chronicle,  September  14,  1918,  p.  1056. 

*  Ibid.,  December  15,  1918,  p.  2325. 


THE   IXITED  STATES 

raws  by  5  cents  per  100  pounds;  the  latter  was  done  to  cover 

among  the  different  sections  of  the  country  as  Jdl  afanon  ' 

he  vanous  classes  of  the  population.     Mr.  Hoo  or  cbTn  ed 

that  but  for  h,s  regulations  the  price  of  sugar  wou  d  rave 

ifofiteers      htdffi   7"  ^^"^•-"•«-  f--  consumersto 

prohteers.     It  ,s  difficult  to  state  what  the  ultimate  effect  of 

the  fixmg  of  basic  prices  for  raw  sugar  and  of  mar^n?  tn 

refiners  and  distributors  would  have  had  u^  the  3  •  ," 

sugar  had  the  war  and  the  Food  Admin.Wation's  ru  „is 

lasted  longer  than  they  did.     According  to  a  statement  "s3 

by  the  Departm<  ...t  of  Agriculture,  there  were  planL  n    "l2 

under  sugar  beets  689.700  acres;  this  was  ..7  oooTc  "s  ,'1! 

han  m  ,917  and  79.000  acres  less  than  in  I9i6.>  a  decrease  o 

14  per  cent  and  10  per  cent  respectively  a«^<^rease  of 

These  figures  do  not  square  with  those  given  by  the  Statis 

tical  D.v.s,on  of  the  United  States  Fo^  Admin^tfatbn 

suZtr'ti:  r'lt  f  ^''^''^  ^"^  ''^  ProductiroTC 
sugar  for  the  L rated  States  were  as  follows  .= 

1915 6m  ^"f  Production 

'916 :.•.•••     ^;'^^S?=*  6,5ii.ooo.hort  ton, 

1917 fi,?'^     ..  6,228,000     •■      •• 

mi ^-^  6,237,000    "     .. 

.  690,000  6,360,000    ■'     " 

Accordmg  to  the  same  source,  the  production  of  cane  sugar  in 

.n  .9x6Tnd  r  ,' A?'""'  '''''''•  ^'^"^  '"  '^'^  *"  ^^^^jJilZ 
Ivai^ableT      n  ^584.000  tons  m  ,9,7  (1918  figures  were  not 
av ailable).     In  the  I  nited  States  the  acreage  and  the  uroduc 
tion  of  cane  sugar  increased  as  follows: »  ^ 

1915 Acreage  Production  of  Sugar 

1916. . .        !!f  "^  '39,000  short  tons       ^ 

221,000  311,00,)      " 

'917 2J.OOO  (•'^"  "''X'O"'?  mistake;  the  yield  per 

'■^■*-°^  acre  .8  given  as  i  short  ton) 

■Monthly  Crop  Reports,  July,  ,9,8  p  70  "^  '""' 

•  f^r:Z  K*"" *  "'  '-^'-^-"A'^'^on  ,0  ,He  War.  p.  ,.. 
J7 


'I 


348  PRICES  AND  PIIICE  CONTROL   DURING  THE   WAR 

That  the  production  of  raw  sugar  in  those  areas  upon  which 

the  United  States  and  the  Allies  had  to  rely  for  their  supply 

has  not  kept  pace  with  the  increased  demand  is  seen  from  the 

following  statement  of  the  Food  Administration.' 

Crapof  Cropof 

1916-1917  1917-1910 

Cub*,  amount  avaibble  (or  export 3,i«S.A96  3.S7I>(mo 

Hawaii,  amount  available  (or  export 636,000  S$.%ooo 

Porto  Rico,  amount  available  (or  export 47>>SI  >  410.000 

United  Sutct  cane 303.900  243.600 

United  Sutet  beet iao.657  7ftS.»o7 

Total 5.504.7*4  5.54a.«o7 

>  OiRclal  Sutement  ol  the  U.  S.  Food  Adminbtration,  September  13,  1918.  p.  9. 


CHAPTER  VI 

Meat  and  Dairy  Producta 

Meat  Pioditts 
One  of  the  effects  of  the  war  was  a  rerlurtum  in  the  number 
o  meat  proclucmg  animals  in  different  parts  of  ,he  world      A 
•urvey  of  the  situation  in  ,9.7  showed  th.  following  results :• 

Cattle ,;!r  '"KKn'mie.  U«rea,c 

Hop l'^'^  Jf'S^**"  54.Soo,ooo 

^■"^'°°*'  3'^°°°  JU.4a3.000 

**•' 33.oao.ooo  9a..mooo  ,,5,005.0^ 

The  decrease  in  the  worlds  herds  was  due  to  a  great  demand 

rnl!!r?f?  ^r^  *'?'*^'  ''"''■«'  *«  ^'"^  «t«nt  upon  the 
I  mted  States  for  pork  products;  the  war  brought  abou  a 
situation  among  the  Allies  which  called  for  an  ever  n^Va  ne 
demand  for  overseas  meat  supplies  of  every  kind.  American 
exports  rose  from  493.848.000  pounds,  the  three-  year  prewar 
r:!;?^;:  '•339..93.ooopoundsin  ,9.5-6.  ^..66  5^^3 
in  1916-17  and  to  3.01 1,000.000  p«,unds  during  the  fiscal  vear 
endmg  June  30.  1918.'  ^^^^ 

Hogs 
The  number  of  hogs  in  the  Inited  States,  which  dropnc^l 
from  65  620.000  in  ,9,.  to  58.933.000  in  ,94.  began  to  r^^ 

ZTJ^'""'  ""''»''  "'  '""^  ^"^=  ^''^  ""-^^  increased": 
64.618.000  m  ,9,5.    However,  by  the  end  of  ,9.7.  conditions 

/«'K"p"??.^'=  "^™'"  ''"''  »-'-  ^^oc^"  ^S.  Foe,  Administration  BulU. 
•  Officer Sutement  of  the  U.  S.  Food  Adm&l^n'/J^ugJst  «.  ,5,8.  p.  , 


-i 


111 


350  rilCBS  AND  PRICE  CflNTROL   Dt'RINO  THE   WAR 

in  the  hog  industry  were  far  from  Mtisfactory;  the  amount  of 
hogu  declined  to  about  60,000,000  head.  One  of  the  moHt 
disquieting  symptoms  was  the  ruthless  slaughtering  of  ani- 
mals in  1916-17. ■ 

Three-year  Fiacal 

prewar  year 

average  1916-17 

Hog  population  Jan.  1 61,600,000  67,450,000 

Number  o(  hoga  alaughtered S3iXM>ooo  64,798.000 

Per  cent  of  hoga  alaughtefed ..    86.3  96. 1 

A /erage  live  weight  in  pounda 319.21  ati.a6 

Exporta  of  pork  pfoductt  in  poundi 992,885,000  1,501,271,0110 

Domeatic  conaumption  in  terma  of  pounda  of  pork 

productt  per  capita 72  oB  7S  77 

The  table  shows  that  whereas  the  three  year  prrv^ar  aver- 
age of  slaughtered  h(^s  was  86.3  per  cent  the  percentage  rose 
to  96.1  for  the  fiscal  year  1916-17;  the  average  weight  of  the 
slaughtered  animal  had  fallen  at  the  same  time  from  319  to 
311  pounds. 

There  was  a  great  deal  of  dissatisfaction  among  h<^  pro- 
ducers due  to  the  fact  that  the  price  of  feed,  particularly  of 
corn,  had  been  rising  more  rapidly  than  the  price  of  hogs; 
notwithstanding  an  increased  demand  for  hog  products  the 
producers  received  in  some  instances  less  for  the  hogs  than  the 
price  of  the  feed  used  in  the  production  of  the  animals.  The 
highest  price  for  hogs  in  the  Chicago  market  in  1914  was 
$io.30  per  100  pounds.  The  price  did  not  begin  to  advance 
until  1916,  when  it  rose  to  $11.60,  the  most  pronounced  rise 
occurring  after  the  United  States  entered  the  war.  On  .'\ugust 
31,  1917,  hogs  were  quoted  in  Chicago  at  $30.00  per  hundred 
pounds. 

It  was  evident  to  the  Food  Administration  that  the  pro- 
duction of  hogs  was  not  keeping  pace  with  home  consumption 
and  with  the  exportation  of  hog  products.  Accordingly,  on 
November  8,  1917,  Mr.  J.  P.  Cotton,  chief  of  the  Food 
Administration  Meat  Division,  issued  a  statement  in  which 
he  outlined  the  future  policy  of  the  Administration  relative  to 
the  prices  of  hogs.  He  pointed  out  the  necessity  of  stabilizing 
the  price,  so  that  the  farmer  should  know  where  he  stands  and 

U.  S.  Food  Adminiatration,  Bulletin  No.  lo,  p.  12. 


THK   l-NITEl)  MTATES 


25  « 


emergency  measure  it  recommonH^  !  "^  ^^  "^^  *" 
J.6.ooperhundredweigh'Tepr^t1ov»'"'"'7'"  '^"^'^  "^ 
acccrdance  with  the  vLiatLn  T:hIZ'oT^''T,  '" 
upon    the   recommendation   of   th..  •    •  "^"'"^ 

Administration  announcrthatt'"r'"'°"'  *''*'  ^'"^ 
for  th«  fo «»«  "uncea  tnat  it  would  attempt  to  secure 

the  hog  rLiSrwrioi     ¥h  T"  '"  "  P"™'""  ""ri""! 


■■SSKS'„'^7r^-'„-,iS-teta;?,^-t'- 


r^ 


«9l8.  p.  7. 


2S> 


PRICES   AND   PRICE  CONTROL   DURING  THE   WAR 


..«! 


The  13  to  I  "basis  fixes  what  might  prove  an  unduly  high 
price  on  hogs  at  the  starting  of  the  packing  season  and  provides 
for  a  gradual  reduction  in  prices,  and  a  normal  descending 
corn  market  would  result  in  the  lowest  prices  probably  being 
arrived  at  in  the  sprir«?  of  the  year,  whereas  the  ordinary  course 
of  the  market  is  the  reverse.  This  plan  may  result  in  the 
warehouses  being  filled  up  with  high  priced  products  even 
though  the  Allied  orders  are  very  considerably  increased,  as 
the  Allied  requirements  only  take  certain  cuts  produced  from 
certain  weight  choice  hogs,  and  the  Allied  orders  do  not  pro- 
vide an  outlet  for  the  cuts  of  all  kinds  of  hogs." 

The  minimum  price  for  hogs  was  fixed  in  October  at  $:7.50 
per  hundredweight.  This  was  done  "in  execution  of  the  de- 
clared policy  of  the  Food  Administration  to  use  every  agency 
under  its  control  to  secure  justice  to  the  farmer."' 

One  of  the  reasons  why  so  much  attention  has  been  given  to 
hog  products  lies  in  the  fact  that  increased  production  in  pork 
fats  may  be  accomplished  much  more  rapidly  than  increased 
production  of  either  dairy  or  vegetable  fats;'  there  was  an 
urgent  need  for  fats  on  the  western  battle  front.  As  Mr. 
Hoover  has  put  it  tersely,  "  if  we  discontinue  exports  (of  fats), 
we  will  move  the  German  line  from  France  to  the  Atlantic 
seaboard."  To  meet  the  increased  demand  both  at  home  and 
abroad  the  stimulation  of  the  production  of  fats  was  deemed 
by  the  Food  Administration  an  absolute  necessity;  it  concen- 
trated its  attention  on  hogs  because  no  fat  producing  crop 
responds  more  quickly  than  does  the  hog  crop.* 

Cattle 
There  has  been  a  steady  decline  in  the  number  of  cattle  in 
this  country,  the  amount  having  dropped  from  56,592,000 
head  in  1907  to  40,850,000  at  the  beginning  of  1917*    In  1914 

'  Official  Sutement  of  the  U.  S.  Food  Administration.  November  I,  1918.  p.  7- 
«  Food  Administration,  Bulletin  No.  10,  p.  10. 

♦FW"  Admnirtradon.  Bulletin  No.  9.  P-  7-  These  figures  apparently  do  not 
inclur^iik™  ,1^  The  R^erenceHandhock  of  Food  ^'^"'^f '»  «'^';»„f,  '„*^ 
War  (Statistical  Division.  Food  Administration)  places  the  number  of  cattle  on 
January  1,  1918,  at  66,830,000. 


THE   UNITED  STATES 


253 


the  United  States  had  20,739,000  dairy  cows  and  35,855,000 
other  rattle,  or  56.5  heads  per  100  of  population  as  compared 
with  90.6  per  100  of  population  in  1890. 

There  is  no  dominant  feed  for  rattle  as  there  is  for  swine, 
therefore  no  attempt  could  he  made  to  stimulate  production 
by  establishing  a  ratio  between  beef  and  feed,  as  has  been 
done  in  the  case  of  hogs.    One  of  the  important  measures 
which  had  been  taken  in  order  to  help  the  cattle  raising  indus- 
try  was  the  licensing  of  all  manufacturers  of  and  iealers  in 
bran,  coarse  grains  and  various  kinds  of  commercial  feeds. 
Hoarding  and  speculation  were  thus  brought  under  control. 
A  concrete  illustration  of  how  the  Food  Administration  dealt 
at  the  end  of  1917  with  the  Texas  situation  will  show  plainly 
the  methods  used  and  the  accomplished  results.    With  the 
price  of  cottonseed  cake  up  to  seventy  dollars  a  ton  from  a 
normal  figure  of  forty-five  dollars  a  ton,  many  cattle  raisers 
had  not  thought  it  worth  while  to  save  the  cattle,  which 
owing  to  the  drought  during  the  month  of  Octol^er  and 
November,  191 7,  began  to  starve  on  their  ranges.    Mr.  Hoover 
brought  together  the  cattle  men  and  the  cottonseed  people. 
After  some  bitter  debate  a  price  of  $50  for  cottonseed  cake 
was  fixed.    The  fixing  of  an  equitable  price  did  not,  however, 
end  the  trouble,  as  most  of  the  crop  was  under  contract 
to  be  shipped  to  the  dairy  cattle  men  in  the  north.    To  insure 
a  sufficient  supply  for  the  Texas  cattle,  the  Food  Adminis- 
tration requested  the  Railroad  War  Board  to  put  an  embargo 
on  the  export  out  of  Texas  of  cottonseed  cakes,  the  feeders 
and  dairymen  outside  of  the  drought  stricken  district  of  the 
Southwest  being  directed  to  secure  their  cottonseed  cake  and 
meal  from  Arkansas,  Louisiana  and  points  east  of  the  Missis- 
sippi River.'    All  the  cottonseed  which  was  to  have  gone  to 
neutral  countries  was  seized  by  the  Food  Administration,  the 
War  Trade  Boird  having  been  asked  to  prohibit  the  export 
of  cottonseed  except  by  license. 

In  the  corn  belt  the  situation  was  aggravated  by  the  iiiade- 

ag!  ?9lJC'p.'»9"'    ^'  ^''  "°°^'"'  "**'  "•"  ^**  ^""""^  GenlUman,  December 


I 


i* . 


354 


PRICES  AND   PRICE   Cf     ROL  DURING  THE   WAR 


quacy  of  transportation  facilities.  In  February,  1918,  Mr. 
A.  Sykes,  president  of  the  Corn  Belt  Meat  Producers'  Asso- 
ciation, called  the  attention  of  the  Senate  Agricultural  Com- 
mittee to  the  fact  that  for  weeks  the  meat  producers  were 
compelled  to  keep  their  fattened  cattle  and  hogs,  feeding 
them  continually,  while  the  prices  of  foodstuffs  soared  and  the 
reserve  seed  stock  diminished.  According  to  him,  75  per  cent 
of  live  stock  in  the  corn  belt  of  the  middle  west  was  unmarket- 
able at  the  time  because  there  were  no  cars  to  move  it.  Mr. 
Sykes  accused  the  Food  Administration  of  having  been  too 
slow  and  expressed  dissatisfaction  at  not  having  practical 
live  stock  men  or  farmers  in  the  organization.  Prompt  re- 
medial action  was  urged  by  him  as  well  as  by  others  who 
appeared  before  the  Agricultural  Committee. 

In  August,  1918,  meat  dealers,  hotels,  public  institutions 
and  housewives  were  urged  by  the  Food  Administration  to  buy 
light  weight  cattle  which  were  coming  on  the  market  from  the 
drought  affected  regions  of  Texas  and  Oklahoma.  The  heavier 
grades  were  needed  for  the  army  and  navy  and  for  the  Allied 
army,  and  the  purchase  of  lighter  beef  by  domestic  consumers 
was  advocated  so  as  to  maintain  a  reasonable  average  price 
for  light  weight  cattle  and  at  the  same  time  secure  for  domes- 
tic use  supplies  of  meat  at  prices  very  much  cheaper  than  that 
demanded  for  heavy  beef.' 

Control  of  the  Meat  Packing  Industry 
While  conferring  with  the  meat  packers  in  Chicago  during 
the  latter  part  of  August,  1917,  Mr.  Hoover  assured  them  he 
had  no  intention  of  fixing  the  price  of  beef  and  pork  products, 
as  had  been  unofficially  announced,  but  that  he  hoped  "to 
develop  by  discussion  with  representative  committees  of  the 
hog  producers,  the  cattle  producers,  the  commission  men  and 
the  packers  greater  stabilization  of  the  industry  during  the 
war,  and  in  such  a  way  as  to  encourage  production,  to  elimi- 
nate speculative  profits  and  risk,  so  far  as  may  be,  and  by  so 
doing  to  protect  the  consumer."' 


'  Official  Statement  of  the  U.  S.  Food  Administration,  September  12, 1918,  p.  13 


«  Monthly  Review  of  the  U.  S.  Bureau  of  Labor  Statistics,  November,  191 7.  P-  83. 


>ept« 

■,  No 


THE    UNITED   STATES 


255 


The  packers  committee  on  September  12  expressed  the 
approval  of  the  government  plan  to  place  the  packing  indus- 
try under  hcense;  and  it  assured  the  Food  Administration  of 
Its  desire  to  co(,perate  in  working  out  the  problems  arising 
outol  the  war. 

On  December  8,  1 91 7,  the  rules  and  regulations  for  controll- 
ing of  slaughtering  and  meat  packing  industries  were  made 
known.  Every  detail  of  the  meat  business  was  put  under 
government  super^'ision.    Maximum  profit  was  fixed  at' 

2J  ,  on  gross  value  of  sales  for  sm  iller  packers. 

The  "meat  business"  was  defined  as  including  all  foods  of 
ammal  origm,  fresh  or  prepared,  also  operation  of  cars  and 
marketmg  branches  and  all  immediate  bv-products  of  live 
stock  such  as  hides,  wool,  fat,  bones,  offal' and  tankage,  but 
not  the  manufactured  specialty  products.     Elafx,rate  regu- 
lations and  accounting  were  provided  to  make  sure  that  the 
meat  profit  was  not  diverted  or  concealed  in  the  specialty 
business,   the  main  purpose  of  these  regulations  being  the 
protection  of  small  packers  against  their  powerful  competi- 
tors.'    To  control  the  packers,  a  Meat  Division  was  estab- 
hshed.  under  Joseph  P.  Cotton,  with  headquarters  at  Chicago. 
1  he  limiting  of  profit  on  investment  was  protested  by  five 
of  Chicago  s  largest  packers.  Armour  &  Co.,  Cudahy  &  Co 
Morns  &  Co    Swift  &  Co.  and  Wilson  &  Co.,  who  contended' 
that  It  would  aflfect  adversely  their  borrowing  capacity  and 
would  prevent  the  necessary  plant  expansion.'     Mr.  Hoover 
m  his  reply  stated  that  investigations  showed  that  prewar 
earnings  of  the  companies  were  less  than  9  per  cent,  and 
that  the  packers'  request  for  increase  was  tantamount  to  their 
asking  that  consumers  pay  for  plant  expansion. 

The  Federal  Trade  Commission,  which  conducted  an  ex- 
haustive investigation  into  the  slaughtering  and  meat  pack- 
ing business,  came  to  the  conclusion  that  the  big  packers 

'Commercial  and  Financial  Chronicle.  March  -    igi8   n  8-7 


25* 


PRICES  AND   PRICE  CONTROL  DURING  THE   WAR 


dominated  prices  both  of  the  live  stock  and  of  the  meat  prod- 
ucts. It  charged  them  with  illegal  profiteering.  The  packers 
pointed  out  that  their  profits  were  only  a  fraction  of  a  cent 
on  a  pound  of  meat  and  that  therefore  they  could  not  be  held 
responsible  for  high  meat  prices.* 

Dairy  Products 
Milk 

The  price  of  milk  began  to  go  up  in  various  large  cities  of 
the  country  in  the  autumn  of  1916.  One  advance  after 
another  took  place  until  in  October,  1917,  milk  was  selling  in 
New  York  at  14  cents  a  quart  retail,'  as  compared  with  9 
cents  in  September,  1916.  During  the  same  period  the  price 
went  up  in  Chicago  from  8  cents  to  13  cents  a  quart. 

In  an  attempt  to  solve  the  problem  of  milk  prices,  the  Food 
Administration  set  up  regional  commissions  on  which  pro- 
ducers, consumers,  distributors  and  milk  experts  were  repre- 
sented. Leading  citizens  of  each  community  were  selected 
to  serve  on  these  federal  boards,  and  public  hearings  at  which 
all  interested  parties  were  given  an  opportunity  to  present 
facts  bearing  on  prices  were  held  at  various  places  throughout 
the  country.' 

No  uniform  national  price  could  l)e  established,  because  of 
great  variations  in  the  costs  of  production  and  distribution 
territorially. 

The  situation  in  Chicago  may  be  considered  as  represen- 
tative of  the  whole  movement  dealing  with  milk  prices.  A 
study  of  this  situation  gives  an  insight  into  what  were  the 
conditions  in  the  production  and  distribution  of  milk  which 
led  to  the  rapid  advance  in  the  price  of  this  essential  and  in- 
dispensable food  product.  The  dominant  factors  in  Chicago 
were  the  rise  of  the  large  dealer  or  distributor  and  the  estab- 
lishment of  the  Milk  Producers'  Association  (an  organization 

'  K.  Wildman:  "Our  Daily  Meat,"  The  Forum,  November,  1910,  p.  587. 
'  The  Literary  Ditest,  October  20,  1917,  p.  12. 

'  1).  Lawrence:  "As  Mr.  Hoover  sees  it,"  The  Country  Gentleman,  December 
29,  1917,  p.  29. 


THE   UNITED  STATES 


257 


of  over  16,000  dairymen)  in  order  to  cope  with  the  concen- 
trated control  of  distribution.' 

In  1893  there  were  2,700  distributors  of  milk  in  Chicago; 
the  number  declined  in  1906  to  1300  and  in  191 7,  to  688,  two 
of  which  controlled  about  40  per  cent  of  the  city's  milk  busi- 
ness.   The  basic  standard  price  which  the  dealers  paid  just 
liefore  the  Milk  Producers*  Association  made  its  full  strength 
felt,  in  the  spring  of  1917,  was  S1.55  per  hundred  pounds.    In 
April,  1917,  the  dealers  had  to  submit  to  the  farmers'  demands 
for  increase  in  price,  which  was  raised  from  $1.55  to  $2.12 
per  hundred  pounds  for  the  summer  months  (May  to  Septem- 
ber) ;'  the  consumers'  price  was  advanced  at  the  same  time  to 
10  cents  a  quart.    When  it  came  to  the  fixing  of  the  price  for 
the  winter  milk,  to  begin  on  Octoljer  i,  191 7,  the  producers 
made  a  demand  for  $3.42  per  hundred  pounds,  claiming  that 
only  at  such  a  price  would  they  be  able  to  profluce  milk  during 
the  feeding  season.    The  distributors  protested,  but  had  to 
submit  to  the  demands  of  the  producers.     The  price  of  $3.42 
was  fixed  at  the  urgent  appeal  of  ihe  Food  Administration  to 
the  farmer  for  the  month  of  October  only,  the  Administration 
having  promised  that  it  would  attempt  to  regulate  the  price 
of  dairy  feeds.    The  retail  price  of  milk  went  up  to  13  cents  a 
quart,  which  caused  a  great  deal  of  agitation  in  the  public 
press  and  among  the  consumers.    When  in  the  end  of  Octol)er 
the  time  came  for  the  renewal  of  the  contract  Iwtween  pro- 
ducers and  dealers,  the  latter  refused  to  sign  unless  the  price 
was  reduced.    The  Milk  Producers'  Association  threatened  to 
stop  the  shipment  of  milk  to  Chicago.    The  State  Food  Admin- 
istrator interfered  at  this  juncture,  apix)inting  an  arbitration 
commission,  whose  duty  it  was  after  an  investigation  to  name 
a  price  for  milk  to  be  paid  to  producers,  which  price  "would 
cover  the  cost  of  pro<luction  and  a  reasonable  profit  thereon," 
also  the  retail  price  to  be  paid  to  distributors,  based  upon 
"the  cost  of  distribution  and  a  reasonable  profit  to  the  dis- 

'  C.  S.  Duncan:. "The  Chicago  .Milk  Inquiry,"  Journ^  of  Political  Economy. 
April,  1918,  pp.  322-^2^.  ' 

» Ibid.,  p.  324. 


I;<: 


•(:  t 


'«; 


#1 


»s» 


PRICES  AND  PRICE   CONTROL  DURING  THE  WAR 


tributor."'  It  was  agreed  that  pending  the  investigation  the 
producers  would  accept  $3.22  per  hundred  pounds  and  the 
distributors  would  retail  the  milk  at  12  cents  a  quart. 

A  mass  of  data  was  presented  to  the  commission  by  dairy- 
men, bankers,  dairy  experts,  distributors  of  milk  and  members 
of  the  dairy  departments  of  agricultural  colleges.  In  arriving 
at  its  decision,  the  commission  assumed  that  in  each  hundred 
pounds  of  milk  produced  there  enter  19  per  cent  home  grown 
grains,  19  per  cent  mill  feeds,  35  per  cent  hay,  27  per  cent 
labor.  Acting  on  this  assumption,  and  having  taken  into 
consideration  the  increase  price  of  feeds  and  labor,  the  com- 
mission, on  February  2,  declared  that  the  following  prices 
should  be  paid  to  the  dairymen:  February,  $3.07;  March, 
$2.83;  April,  $2.49;  May,  $2.04;  June,  $1.80. 

The  price  to  consumers  was  left  at  12  cents  a  quart.  Six 
out  of  nine  commissio.icrs  concurred  in  the  decision,  which 
was  immediately  declared  by  the  producers  to  be  not  accept- 
able to  them.  Two  representatives  of  the  federal  Food 
Administration  were  called  in  to  review  the  findings  of  the 
commission.  In  the  meantime,  one  of  the  commissioners, 
Dean  Davenport  of  the  College  of  Agriculture  of  the  Univer- 
sity of  Illinois,  seceded  from  the  commission  and  in  an  open 
letter  to  the  State  Food  Administrator  expressed  his  disap- 
proval of  its  findings.  The  commission  which  met  on  Febru- 
ary 21  for  review  reaffirmed  the  conclusions  of  the  first  deci- 
sion and  for  the  month  of  February  the  price  to  producers  as 
set  by  the  commission  remained  in  force. 

Upon  arrival  of  the  two  representatives  from  Washington, 
efforts  were  made  to  reacli  a  satisfactory  adjustment.  On 
March  1  an  agreement  was  concluded  with  the  producers  by 
means  of  which  they  were  to  receive  the  price  of  $3.10  per 
hundred  pounds  for  the  month  instead  of  $2.83,  as  determined 
by  the  first  findings  of  the  commission.  The  dealers  consented 
to  pay  this  higher  price  without  raising  the  price  to  the 
consumer.      Prices  for  the  succeeding  months  were  to  be 

'  C.  S.  Duncan:  "The  Chicago  Milk  Inquiry,"  Journal  of  Political  Economy, 
April,  191S,  p.  326.  ' 


THE    UNITED   STATES 


259 


determined  on  .he  basis  of  the  prices  published  by  the  De- 
partment of  Agriculture.'  >   »■«-  i^e 

Butter 
The  average  price  of  creamery  butter  for  19,3  was  29.60 
cents  per  pound,  m  Chicago;  in  July,  ,9,4,  it  was  25.56  cents 
al^ut  the  same  as  ,n  July  of  the  previous  year,  the  price  of 
r^lll       TU    "'"^  '^  ^"^^^^^t  lower  during  the  summer 
months.    There  was  no  advance  in  the  price  during  19,5  and 
the  average  for  the  jear  was  lower  than  for  1914.  namely 
274.^  cents  a  pound.    The  rise  began  in  the  autumn  of  ,9,6 
and  |,y  December  of  that  year  butter  was  quotetl  in  the 
Chicago  market  at  37.31  cents  a  ,x,und;  it  has  never  gone 
much  be  ow  th.s  figure  since,  the  lowest  quotation  Mng  ,6  81 
cents  m  January,  T917.  and  37  cents  in  July,  ,917.    In  Decem- 
ber   ,917.  butter  sold  at  46.75  cents,  and  the  a^erage  price 
or  the  year  was  40.34  cents;  the  continued  advance  through 
198  brought  the  pnce  up  to  55.25  cents  a  pound  in  October  ^ 
I  nt.l  the  early  part  of  19,8  the  Food  Administration  made 
no  attempt  to  establish  maximums  or  to  fix  any  definite  prices 
for  butter.  ,ts  control  having  been  confined  to  the  elimination 
o   speculation.    With  this  aim  in  xiew.  it  promulgated  a  set 
of  rules   governing   transactions   on   the   butter  exchanges 
during  the  war  (November  15,  igi;).^  ^ 

On  January  19,  1918,  the  Food  Administration  announced 
the  fc^lowing  wholesale  prices  for  storage  creamerv  butter- 

1.  Aew  ^orlc  and  other  points  in  seaboard  teri^itory  d- 
monVsr""''  "^'""  ^^"^  '■^'"'''"''''''  "^  ^^"^  ^^^""  (aJ«ut  two 

2.  Chicago:  45*  cents  a  pound  till  February  i  when  the 
price  was  to  be  advanced  one-fourth  of  a  cent  on  the  1st  and 
1 5th  of  each  month  until  all  creamery  butter  was  released  from 
storage. 

Tht-se  prices  were  established  with  the  voUintarv  coopera- 
tion of  the  butter  trade.  ' 

Apru:  f9.°"pT34.-J44   '""'''°  '""  '"''"'"^'■"  ^'"'"""  "^  ^'"'"-'  ^-»'""^. 
rg'.s'^p'  '9'"'"""  ''°''"'-  ^""<^""  "f  •'^'°"'>">-  Prices  during  the  War,  Noveml,er. 


'  rt  vTl"'  ""''  ^•""'^'"l  CkronicU,  March  2,  ,9,8   p   8" 
Ibid..  Februar>-  2,  1918.  p.  446.  ^     '  P'     ' 


ate  PIIICES  AND  PRICE  CONTROL  DURING  THE  WAR 

Comprehensive  regulations  governing  margins  which  dealers 
in  butter  could  add  to  the  cost  price  were  promulgated  in 
June,  1918.  According  to  these  regulations,  licensees  dealing 
in  cold  storage  butter  were  requested  to  sell  it  at  a  price  based 
on  actual  cost,  not  on  replacement  cost,  the  actual  cost  in- 
cluding purchase  price,  transportation  charges,  storage  and 
insurance  charges,  interest  during  storage-  period  and  cost  of 
printing.  Costs  were  not  to  include  allowances  for  shrinkage 
in  weight,  commissions  or  other  expenses  not  listed  above. 

Maximum  margins  which  dealers  were  allowed  to  add  to 
cost  price  were  on : 

Carloadi 1  cent  per  pound 

Lots  between  7,000  pounds  and  a  car  load I  i  centi  per  pound 

700  to  7,000  pounds If  cents  per  pound 

Less  than  700  pounds »l  cents  per  pound 

These  margins  for  sales  of  amounts  less  than  7,000  pounds 
were  changed  on  July  19  to  2  cents  per  pound  for  3,500  to  7,000 
pounds,  2  J  cents  per  pound  for  700  to  3,500  pounds,  3  cents  per 
pound  for  less  than  700  pounds,  but  amounting  to  100  pounds 
or  more,  and  3f  cents  per  pound  on  sales  of  less  than  100 
pounds.'  Commissions  were  limited  to  three  quarters  of  a 
cent  per  pound.  Attention  of  the  licensees  was  called  to  the 
provision  that  "the  licensee  in  selling  food  commodities  shall 
keep  such  commodities  moving  to  the  consumer  in  as  direct  a 
line  as  practicable  and  without  unreasonable  delay."  Resales 
within  the  same  trade  without  reasonable  justification,  es- 
pecially if  tending  to  result  in  a  higher  market  price  to  the 
retailer  or  consumer,  were  dealt  with  as  an  unfair  practice. 

Cheese 

Governmental  control  of  cheese  prices  did  not  begin  until 
June,  1918,  when  the  Food  Administration  issued  regulations 
governing  manufacturers,  dealers,  brokers  and  commission 
merchants  making  or  handling  cheese.  These  regulations 
were  the  result  of  conferences  between  the  representatives  of 
the  cheese  trade  and  the  officials  of  the  Food  Administration. 
No  limitation  was  placed  on  the  price  to  be  received  by  the 
farmer.    Commissions  on  the  sales  of  American  or  Cheddar 

« MonlUy  Labor  Review,  September,  1918,  p.  599. 


THK    UNITED  STATES  g^f 

cheese  were  limited  to  i  cent  per  pound,  and  the  following 
margins  of  advance  were  established  for  interme<liate  mer- 
chants between  the  manufacturers  ami  the  retailers: 

On  car  lot  ulm I  ^.«..  __  j 

I^  than  car  lot  but  not  ie»  than  r.oti) i»und.. ■.■.•;.■.  ...  i f  ^",.  S^r  S^und 
5«o  to  7,000  pound* •  •  •    ■  I  crni»  per  pouna 

U.  than  Stiipound..  ! 'IcIS  !lf'  P"""^ 

•^  3  cent*  per  pound 

On  cheese  stored  more  than  30  days  a  maximum  of  i  cent  per 
pound  could  be  added  each  month,  total  not  to  e.xccetl  i  cent.' 

In  July  the  margins  were  modified  on  lots  smaller  than  7.000 
pounds,  being  "made  wide  enough  to  provide  for  exceptional 
cases  where  the  cost  of  doing  business  was  high."^  The  mar- 
gins were:  1}  cents  on  4.000  to  7.000  pound  sales;  2.J  cents 
on  sales  of  1,000  to  4,o(X)  pounds;  3  cents  on  sales  between 
100  and  1,000  pounds;  and  3J  cents  on  sales  less  than  100 
pounds.  These  were  maximum  margins  and  a  dealer  was  not 
allowed  to  charge  the  limits  if  by  doing  so  he  made  an  ex- 
cessive profit. 

New  regulations,  this  time  covering  all  important  kinds  of 
cheese,  including  such  foreign  types  as  Swiss,  brick,  limburger 
and  Munster  were  issued  in  August;  they  supplanted  all  the 
former  rules.  The  selling  price  of  cheese  had  to  be  based  on 
actual  cost  plus  rea  ;onable  profit  without  regard  to  market 
or  replacement  value.'  Cost  for  the  purpose  of  this  rule  in- 
cluded (i)  purchase  price,  (2)  transportation  charges,  if  any, 
(3)  storage  charges  actually  incurred,  (4)  insurance  charges, 
(5)  interest  on  money  invested  at  the  current  rate,  (6;  actual 
cost  of  paraffining,  if  any,  not  to  exceed  one-fourth  cent  per 
pound. 

I'ndcr  the  alx)ve  ruling,  the  Retail  Section  of  the  Distribu- 
tion of  Perishables  of  the  United  States  Food  Administration 
investigated  the  cost  of  handling  cheese  at  retail  and  deter- 
mined that  in  selling  American  or  Cheddar  cheese  any  advance 
in  excess  of  6  or  7  cents  per  pound  o\er cost  was  unreasonable.* 

Kinds  of  cheese  not  mentioned  in  the  rules  came  under 
general  rules  in  res|)ect  to  excess  profits. 

'  Commercial  and  Financial  Chronicle,  June  22,  1918,  p  261 1 

■  Monthly  Labor  Rmrw,  September.  1918,  p.  124. 

•  Commercial  and  Financial  Chronicle.  August  10,  1918  p  JSQ 

•Official  Statement  of  the  U.  S.  Food  .Administration',  October  i,  1918,  p.  17. 


CHAPTER  VII 
Pu«l 

Coal 

During  the  first  two  years  of  the  war  the  c  oal  situation  in 
the  I'nited  States  was  noi  matirially  different  from  what  it 
had  been  liefore  the  outbreak  of  hostilities  in  Eurfun-.  Keep 
ing  pace  with  a  growing  demand,  production  rost-  from  513, 
522,477  tons  in  1914,  to  5,^1,619,487  tons  in  1915  and  to  590,- 
098,175  tons  in  1916.  Duo  to  war  activities  and  to  traffic 
congestion,  a  local  shortage  of  roal  occurred  in  some  parts 
of  the  country  during  the  autumn  and  winter  months  of 
1916-17.  This  shortage  caused  hardships  to  many  house- 
holders and  difficulties  in  industrial  plants.  A  panit  developed 
with  its  concomitant  rush  on  the  part  of  consumers  t«i  purchase 
coal  at  any  price."  Bituminous  coal  was  selling  in  the  year 
ending  December  31,  191 6,  at  from  $1.25  to  Si. so  per  ton  at 
the  mines.  Prices  began  to  advance  during  the  latter  part  of 
that  year.  They  rose  sharply  in  the  early  months  of  191 7, 
reaching  in  the  summer  the  unprecedented  height  of  57  and 
$8  per  ton.  Public  dissatisfaction,  which  had  In-en  aroused 
long  before  this  by  jjrice  increases  made  by  anthracite  op- 
erators in  the  beginning  of  1916,'  became  mtwt  pronounced 
and  widespread.  The  government  felt  that  somethinji;  had 
to  be  done  in  order  to  bring  prices  under  control. 

In  pursuance  of  the  Hitchcock  resolution  introduced  in  the 
Senate  on  June  22.  iy)ib,  an  investigation  into  the  produc- 
tion, distribution  and  cost  of  anthracite  coal  had  l)ecn  carried 
on  by  the  Federal  Trade  Commission  during  the  fall  and 
winter  of  1916-17.'     The  commission  in  the  course  of  this 

'  Methods  of  Fixing  Prices  of  Bituminous  Coal  .Adopted  by  U.  S.  Fuel  Admin- 
istration, Publication  No.  29,  September  20,  1918,  p.  141 1. 

'  VV.  Notz:  "The  World's  Coal  Situation  during  the  War,"  Journal  of  Political 
Economy,  July,  1918,  p.  674. 

>Jbid. 

2O2 


THK  VNITBD  STATM 


»«3 


.mjuiry  i«on  dii«,veml  that  an  independent  investigation 
of  the  anthracite  coal  .ituation  wa.  not  feasible,  a.  a  c\Z 
connection  exi.t.  between  the  um  of  anthracite  and  of  bit^ 
m.nou»  coal  one  kind  of  coal  being  «ul«,i,uted  for  another 
with  increased  demand  and  rising  prices 

The  report  of  the  Federal  Trade  Commission  was  »ub- 
rnit  ed  to  Congre«i  on  June  ,o.  ,917.    Acconling  to  this  re- 
port,  the  large  railroad  companies  had  <mly  slightly  increased 
their  basic  prices  at  the  mines;  a  much  greater  advantje^ 
the  market  situation  was  taken  by  a  numlx-r  of  independen 
operators  who  raised  their  price,  from  Sl.oo  .«  Ss.oTa  ton 
Blame  was  also  placed  upon  the  jobbers,  the  inajorfty  S 
whom  averaged  double  o,  treble  their  normal  gros    ^.ofits 
C  onditions  in  the  retail  coal  market  were  found  to  differ 
ma  erially  in  various  parts  of  the  country.    Thus  while  the 
coal  dealers  in  Minneapolis.  St.  Paul.  .Milwaukee  and  Buf! 
fab  had  not  tc^en  undue  advantage  of  the  crisis,  those  in 
Chicago  and  in  Boston  had  increased  their  gross  margint  by 
as  much  as  Si. 50  or  $1 .75  per  net  ton.'  ^ 

The  commission  came  to  the  conclusion  that  those  coil 
operating  companies  whose  books  had  Iwn  audited  were  not 
justified  in  their  increase  of  prices  by  the  increase  in  ost 

An  investigation  into  the  conditions  of  the  bituminous  coal 
industry  was  conducted  by  the  Federal  Trade  cJmm  sstn 

sTuatSrol'r'^'  •"  •"^^"?^*'""  "^  ''^  anthradTecoa 
situation     On  June  19.  1917.  the  commission  reported  to  the 

House  of  Representatives,  that  in  its  opinion  the  coal  indus- 
try was  suffering  from  inadequacy  of  transportation  faciUt  "es 
which  curtailed  output  and  thus  produced  a  shortage  oa^a' 
The  commission  recommended  in  a  majority  report  (,)  that 

n  th:^"'r7^  '°''  ""^  '''^'  ^  ^°"d-^«^  ^hVough  a  po^ 
in  the  hands  of  a  government  agency;  that  the  producerVof 
various  grades  of  fuel  be  paid  their  full  cost  of  proSucti'on  plus 
a  uniform  profit  per  ton  (with  due  allowance  for  quality  oJ 

'W.  Noti:   o/>.  £•«•/.,  p.  675. 
Coaf'Pe°o.  %%^t''if.  """''  C*""™'"'""  o"  Anthracite  and  Bi.umlnou. 


u 


maoctm  hsowtion  tbt  cmart 

(ANSI  and  ISO  TEST  CHART  No.  2) 


jg     APPLIED  M/K^ 


1653  Eost   Main   street 

Rochester.  Ne.  Yon         14509       USA 

( "  6)  482  -  0300  -  Phone 

("«)   288-  5989  -  Fo> 


264  ™ICE''   *^'°  ''*"^^   CONTROL  DURING  THE  WAR 

product  and  efficiency  of  service),  (2)  that  the  transportation 
agencies  of  the  United  States,  both  rail  and  water,  be  similarly 
pooled  and  operated  on  government  account  under  the  direc- 
tion of  the  President,  and  that  all  such  means  of  transporta- 
tion be  operated  as  a  unit,  the  owning  corporations  being  paid 
a  just  and  fair  compensation  which  would  cover  normal  net 
profit,  upkeep  and  betterments.  ... 

In  the  summer  of  1917  the  handling  of  the  coal  situation 
was  entrusted  to  a  Committee  for  National  Defense,  headed 
by  Mr.  Peabody,  a  well  known  coal  operator.  This  com- 
mittee soon  after  its  establishment  reached  an  agreement  with 
the  operators,  by  which  the  flat  price  for  bituminous  coal 
was  set  at  S3.00  per  ton  at  the  mines.'  This  price  was  immedi- 
ately repudiated  by  Secretaries  Baker  and  Daniels  as  being  too 
high »  Their  stand  found  an  almost  unanimous  support  in 
the  popular  press,  which  took  the  occasion  to  discredit  at  the 
same  time  all  other  activities  of  the  coal  experts. 

The  summer  months  of  191?  went  by  without  any  definite 
settlement  of  the  price  question.  Because  of  the  uncertainty 
of  these  months,  operators  withheld  from  maximum  produc- 
tion thus  paving  the  way  for  the  subsequent  shortage  of  coal. 
The  realization  of  the  fact  that  the  coal  situation  was  growing 
in  acuteness  led  to  the  insertion  into  the  Food  Control  Bill, 
while  it  was  being  discussed  in  the  Senate,  of  a  section  giving 
the  President  sweeping  powers  concerning  coal. 

The  act  provided  that  "  the  President  of  the  United  States 
shall  be  empowered,  whenever  and  wherever  in  his  judgment 
necessary  for  the  efficient  prosecution  of  the  war  to  fix  the 
price  of  coal  and  coke,  wherever  and  whenever  sold,  either  by 
producer  or  dealer,  to  establish  rules  for  the  regulation  of  and 
to  regulate  the  method  of  production,  sale,  shipment,  distribu- 
tion, apportionment  or  storage  thereof  among  dea.ers  and 
consumers." 

>  Report  of  the  Federal  Trade  Commission  on  Anthracite  and  Bituminous  Coal. 
^TcZ'^^^Wnancial  CHronicle,  July  7,  .9.7,  P^  -    K"he  price 

tion  costs. 


THE  UNITED  STATES  365 

The  President  was  empowered,  in  case  any  producer  or 
dealer  failed  cr  neglected  to  conform  to  the  President's  prices 
or  regulations,  to  requisition  the  plant,  business  and  all 
appurtenances  thereof  belonging  to  such  producer  or  decler. 
He  was  authorized  to  operate  such  plants  through  an  agency 
selected  by  him,  paying  the  owner  a  just  c<*nipensation.'  He 
was  also  authorized  if  ho  deemed  it  necessary  to  require  coal 
producers  to  sell  their  products  only  to  the  I'nited  States 
through  an  agency  designated  by  him,  "such  agency  to  regu- 
late the  resale  of  coal  and  coke,  the  prices  tlureof  as  well  as 
the  methods  of  production,  shipment,  distribution,  appor- 
tionment and  storage." 

The  prices  to  be  paid  were  to  be  based  upon  a  fair  and 
just  profit  over  and  above  the  cost  jf  production,  including 
proper  maintenance  and  depreciation  charges.  The  reason- 
ableness of  such  profits  and  cost  of  production  was  to  be  de- 
termined by  the  Federal  Trade  Commission. 

Acting  under  the  authority  of  this  act,  the  President  fixed 
on  August  21,  1917,  a  schedule  of  provisional  bituminous  coal 
prices,  for  the  sale  of  coal  not  under  contract;  on  August  23 
he  fixed  in  a  similar  way  prices  for  anthracite  coal.  On  the 
same  date  Mr.  Harry  A.  Garfield  was  appointed  United 
States  Fuel  Administrator. 

The  President's  prices  for  bituminous  coal  were  specified 
for  run-of-mine,  prepared  sizes  and  slack  or  screening;  they 
were  fixed  by  States  and  in  a  few  instances  by  districts  and 
by  seams.  These  prices  were  based  on  average  figures  on 
about  100,000,000  tons  production,  prepared  by  the  Federal 
Trade  Commission  "from  the  very  meager  data  in  its  pos- 
session, generally  from  the  larger  and  lower  cost  operators  of 
each  district.''^" 

According  to  the  President's  proclamation,  the  provision- 
ally fixed  prices  were  based  upon  the  actual  cost  of  production 
and  were  deemed  to  be  not  only  fair  and  just  but  liberal  as 
well.    They  were  as  follows : ' 


uu: 


I  r 


,,l 


,  ■f,"*o"^  "^'^''  ^°-  ■+'•  ^5th  Congress  (H.  R.  4961),  pp.  9-10. 
'  U.  S.  Fuel  Administration  PvHication  No.  2Q,  September  20, 
'Official  Bulletin,  vol.  i,  No.  88,  August  22,  1917,  p.  1. 


1918,  p.  1412. 


ii^ 


266 


PRICES   AND   PRICE   CONTROL  DURING  THE  WAR 


Pennsylvania 

Maryland 

Weit  Virginia 

West  Virginia  (New  River) 

Virvinia 

Ohio  (thick  vein) 

Ohio  (thin  vein) 

Kentucky 

Kentucky  (Jellico) 

Alabama  (big  seam) 

Alabama  (Pratt,  Jaeger,  and  Corona) .  . 
Alabama  (Cahaba  and  Black  Creek) . . . 

Tennessee  (eastern) 

Tennessee  GeUico) 

Indiana 

Illinois 

Illinois  (third  vein) 

Arkansas 

Iowa 

Kansas 

Missouri 

Oklahoma 

Texas 

Colorado 

Montana 

New  Mexico 

Wyoming 

Utah 

Washington 


Run  of  Mine 

$3.00 
3.0O 


oo 

15 
00 
00 
35 
95 
40 
1 .90 

2.15 
3.40 
a. 30 
3.40 
I  95 

1  95 
3.40 

2  65 
3.70 

2-55 
2.70 

3  05 
2.65 

2-45 
2.70 
2.40 
3.50 
2.60 
3  25 


Prepared 
Sizes 
$2.25 

2.35 
3.35 
3.40 
3.35 

25 
60 

30 

65 

15 

40 

3.65 

2.55 

2.65 

3. 20 

2.30 

2.65 

3.90 


95 
80 

95 
30 
90 

70 
95 
65 
75 
85 
50 


Slack  or 
Screenings 

$1  75 
I  75 
1-75 
1 .90 

I  75 

1  75 

3..0 

1.70 
2.15 
1.65 
1.90 
2.15 
2.05 
2.15 
1.70 
1.70 
3.15 
3.40 

2-45 
2.30 

2  45 
2.80 
3.40 
2.20 
2.45 
2.15 
2  25 

2  35 

3  00 


Note. — Prices  are  on  f.  o.  b.  mine  basis  for  ton  of  2,000  pounds. 


The  order  f-xm^  anthracite  coal  prices  enumerated  sixteen 
most  importan.  prod.iceis  (the  railroad  companies'  mines)  to 
whom  the  measure  applied ;  others  (the  so-called  independent 
operators'  mines)  were  permitted  to  charge  higher  prices 
provided  they  did  not  exceed  the  scheduled  prices  by  more 
than  75  cents  per  ton.  The  prices  were  maximum  prices  per 
ton  of  2,240  pounds  free  on  board  cars  at  the  mines  and  they 
varied  in  accordance  with  the  grades  and  sizes'  ot  coal  as 
follows : 


Broken . . 

Egg 

Stove .... 
Chestnut. 
Pea 


ite  Ash 

Red  Ash 

Lykens  Valley 

4-55 

U-75 

$5  00 

4  45 

465 

4.90 

4  70 

4.90 

5  30 

4.80 

4.90 

5  30 

4.00 

The  price  ui  .v'hite  Ash  pea  coal  was  reduced  by  the  Fuel 
Administrator  on  October  i,  1917,  to  $340;  a  P"ce  of  $3.50 


THE   UNITED  STATES 


267 


for  Red  Ash  pea  -oal  and  of  $3.75  for  Lykens  \alley  pea  coal 
was  estnh.ishcd  at  the  same  time. 

The  President's  prices  were  subsequently  added  to  and 
revised  at  different  times  hy  the  Fuel  AdministraK.r;  special 
prices  were  fixed  for  individual  mines,  for  spec". I  coal  fields 
or  districts,  as  well  as  for  different  States.  :  .  a  of  these 
revisions  raised  prices  ostensibly  because  of  wage  increases  to 
mine  workers,  but  also  in  order  to  assure  greater  profit  to 
mine  operators.  The  most  important  of  these  increases  was 
one  provided  by  an  order  of  October  27.  1917.  which  raised 
the  price  of  bituminous  coal  by  45  cents  per  ton  above  the 
i'resident  s  prices,  and  another  which  increased  the  price  of 
anthracite  coal  by  35  cents  a  ton  on  December  i.  1917  ■ 

The  plan  adopted  by  the  Fuel  Administrator  was  to  fix 
prices  so  that  each  operator  should  receive  a  limited  profit 
Hence  the  price  was  fixed  relatively  low  for  coal  from  thick 
seams,  easily  and  cheaply  mined  and  high  for  the  thin  and 
poor  seams,  the  cost  of  mining  from  which  is  much  greater 
in  the  fixing  of  prices,  very  inefficient  small  mines,  remote 
irorn  transportation  facilities,  were  not  considered.  W^hile 
differences  in  prices  existed  for  coal  of  equal  grade,  the  larger 
part  of  the  variations  in  the  prices  announced  for  bituminous 
differentials  "^  *°  difference  in  quality  of  coal  and  to  freight 

On  December  15,  1917,  export  and  foreign  bunker  coal 
prices  were  fixed  at  $1.35  per  ton  above  the  domestic  scale- 
this  order  applied  to  all  countries  except  Mexico  and  Canada  • 
The  seller  of  the  coal  or  such  other  agency  as  perform^  the 
actual  work  of  bunkering  or  loading  was  allowed  to  add  the 
ciistomary  or  proper  charges  for  storage,  towing,  elevation 
trimming,  special  unloading  and  other  port  charges.  An 
amendment  to  the  order  issued  on  February  25,  1918  pro- 
vided that  no  coal  could  be  invoiced  at  the  excess  price  except 
by  the  operator  or  dealer  who  actually  loaded  it  into  foreign 

'Commercial  and  Financial  Chronicle.  December  8,  19,7,  „.  22,3 
I  !'■  c    r    "^  ^T'.  C<>'>""'<^ion  and  Regulation,  p.  \J 
L.  b.  Fuel  Administration.  Publication  No.  15  (Revised). 


I 


% 


:i; 


ill 


"^^ 


368 


PRICES  AND  PRICE   CONTROL  DURINO  THE   WAR 


vessels  and  only  after  the  coal  had  been  so  loaded.  The 
amendment  stipulated  also  that  in  settling  the  price  of  coal 
for  foreign  bunkering  or  export  purposes,  no  jobber's  margin 
or  other  commission  in  addition  to  .le  Si. 35  pei  ton  should 
be  added  to  the  price  of  the  coal. 

A  cut  of  10  cents  per  ton  in  the  price  of  bituminous  coal  \yas 
made  on  May  25,  191 8.  The  reason  assigned  for  the  reduction 
was  that  certain  advantages  were  accorded  coal  operators 
through  the  installation  of  a  new  system  of  "even  car  supply" 
by  the  Railroad  Administration;'  the  railroads  agreed  to  pay 
fixed  prices  for  coal  and  to  abandon  the  practice  of  giving 
preferential  car  service  to  mines  furnishing  railroad  fuel;' 
this  was  expected  to  effect  substantial  economies  in  the  min- 
ing and  shipping  of  coal. 


Jobbers'  Margins 

The  President's  order  of  August  23,  1917.  which  fixed  the 
provisional  anthracite  coal  prices,  established  also  jobbers' 
margins.  According  to  this  order,'  for  the  buying  and  selling 
of  bituminous  coal  a  jobber  was  permitted  to  add  to  his  pur- 
chase price  a  gross  margin  not  in  excess  of  15  cents  per  ton  of 
2,000  pounds ;  for  buying  and  selling  of  anthracite  coal  a  jobber 
could  not  add  to  his  purchase  price  in  excess  of  20  cents  per 
ton  of  2,240  pounds  when  delivery  of  this  coal  was  to  be 
effected  at  or  east  of  Buffalo;  a  gross  margin  not  to  exceed  30 
cents  per  ton  was  allowed  for  the  delivery  of  anthracite  coal 
west  of  Buffalo.  A  jobber's  gross  margin  could  be  increased 
by  5  cents  per  ton  of  2,240  pounds  when  the  jobber  incurred 
the  expense  of  rescreening  it  at  Atlantic  or  lake  ports  for 
transshipment  by  water. 

The  President's  order  was  supplemented  by  the  rulings  of 
the  Fuel  Administrator  issued  on  October  6.*  These  rulings 
referred  to  contracts  which  had  been  concluded  by  jobbers 

«  The  Iron  Age,  May  30,  1918,  p.  H^S- 
«  Commercial  and  Financial  Chronicle,  June  I,  1918.  P-  2292- 
»  U.  S.  Fuel  Administration,  Publication  No.  3,  August  23.  «9I7- 
*Ibid.,  No.  9. 


THE    INITED   STATES  269 

previous  to  the  establishment  of  the  maximum  price  and 
margins.    They  were  as  follows: 

Free  coal  »hippe<l  from  the  mineii  subrcquent  to  the  promulKation  of  the  Pn-si- 
denfi  order  fixing  the  price  'or  such  coal  shall  reach  the  .l.altr  at  not  more  than 
the  price  fixed  by  the  President's  order  phis  only  the  prescrilieil  jobl)er'»  commis- 
sion (if  the  coal  has  been  purchased  through  a  joblwr)  anil  transportation  charges. 

A  jobber  who  had  already  contracted  to  buy  coal  at  the  time  of  the  President's 
order  fixing  the  price  of  such  coal,  and  who  was  at  that  time  already  under  contract 
to  sell  the  same,  may  fill  his  contract  to  sell  at  the  price  named  therein. 

A  jobber  who,  at  the  time  of  the  President's  order  fixing  the  price  of  the  coal  in 
question  at  the  mine,  had  contracted  to  buy  coid  at  or  below  the  President's  price, 
and  at  that  time  had  no  contract  to  sell  such  coal,  shall  not  sell  the  same  at  a  price 
higher  than  the  purchase  price  plus  the  proper  jobber's  commission  as  determined 
by  the  President's  regulation  of  .August  23,  rgi;. 

A  jobber  who,  at  the  time  of  the  President's  order  fixing  the  price  of  the  coal  in 
question,  was  under  contract  to  deliver  such  coal  at  a  price  higher  than  a  price 
represented  by  the  price  fixed  by  the  President  or  the  Fuel  Administrator  for  such 
coal  plus  a  proper  jobber's  commission  as  determined  by  the  President's  regula- 
tion of  August  J3.  1917.  shall  not  fill  such  contract  with  coal  purchase<l  after  the 
President's  order  became  effective  and  not  contracted  for  prior  thereto  at  a  price 
in  excess  of  the  President's  price  plus  the  proper  jobber's  commission. 

A  jobber  who,  at  the  date  of  the  President's  order  fixing  the  price  of  the  coal  in 
question,  held  a  contract  for  the  purchase  of  coal  without  having  alrtad  sold  or 
contracted  to  sell  such  coal,  shall  not  sell  such  coal  at  more  than  the  price  fixeti  by 
the  President  or  the  Fuel  Administrator  for  the  sale  of  such  coal  after  the  date  of 
such  order,  plus  the  jobber's  commission  as  fixed  by  the  President's  regulation  of 
August  83,  1917. 

According  to  an  announcement  made  on  November  8, 
191 7.  contract  coal  which  a  jobber  had  purchased  at  a  price 
higher  than  the  maximum  could  be  sold  by  him  at  a  sufficient 
advance  so  that  his  profits  would  be  the  same  as  if  he  had 
obtained  coal  at  the  price  fixed.  In  order  to  take  ad\antage 
of  this  order,  the  jobbers  had  to  show  that  the  coal  was 
contracted  for  in  bona  fide  agreement  prior  to  the  President's 
proclamation.  The  coal  had  to  be  sold  to  the  purchasers 
designated  by  the  State  Fuel  Administration. '• 

Retail  Prices 
Retail  prices  of  coal,  according  to  an  announcement  made 
by  the   Fuel  Administrator  on  September  30,    1917,   were 
established  in  the  following  manner:     Coal  dealers  had  to 
'  C.  R.  \'an  Hise:  op.  cil.,  p.  157. 


m 


I 


it 


m 


ajo 


PRICES   AND   PRICE  CONTROL  DURINO  THE   WAR 


ascertain  their  retail  margins  in  1915;  to  this  they  were  per- 
mitted to  add  an  amount  not  exceeding  30  per  cent  of  that 
margin,  including  their  profits  at  that  time.'  Retail  dealers 
who  had  not  been  in  business  before  January  i,  191 6,  were 
allowed  to  continue  to  sell  at  the  gross  margin  which  they  had 
received  during  the  period  in  which  they  had  been  in  business, 
provided  that  this  margin  did  not  exceed  that  which  was 
received  during  July,  1917.' 

The  regulatii  ~i  of  the  retail  sale  of  coal  was  placed  in  the 
hands  of  local  fuel  committees  of  citizens  where  there  were 
complaints  that  excessive  profits  were  made  by  retailers. 
These  committees,  after  ascertaining  the  retailer's  cost  of 
conducting  business,  reported  to  the  State  Fuel  Administra- 
trator  what  they  considered  to  be  the  proper  maximum 
retail  gross  margin  for  the  community.'  The  price  to  the 
consumer  consisted  of  this  margin  plus  the  cost  of  coal  at  the 
mine,  the  transportation  charges  and  the  jobber's  com- 
mission (when  sold  through  a  jobber).* 

Bona  fide  contracts  enforceable  by  law,  made  before  October 
I,  were  not  affected  by  the  order.  However,  only  minimum 
amounts  were  to  be  delivered  under  such  contracts  as  long  as 
reasonable  requirements  of  other  consumers  had  not  been  met. 

Retail  dealers  were  under  an  obligation  to  ascertain  on  the 
first  and  sixteenth  days  of  each  calendar  month  the  average 
cost  to  them  of  coal  or  coke.  Monthly  reports  were  required 
by  the  United  States  Fuel  Administrator  and  the  Federal 
Trade  Commissi'^'  tlir  se  reports  showed  the  cost  of  coal  or 
coke  received  b;  '     •  rs,  their  sales  prices  and  their  gross 

margins. 

By  a  decisio  /uel  Administration  passed  during 

the  latter  part  ot  x  .j.uary,  retail  dealers  after  April  i,  1918, 
could  purchase  coal  at  the  same  price,  whether  they  bought 
it  directly  from  mines  or  through  jobbers.    It  was  stated  that 

•  Monthly  Review  of  the  U.  S.  Bureau  of  Labor  Statistics,  November,  1917,  p.  89. 
'  "  Maximum  Gross  Margins  of  Retail  Coal  Dealers,"  U.  S.  Fuel  Administration, 

Publication  Xo.  7. 

*  "Fuel  Facts,"  Published  by  the  U.  S.  Fuel  Administration,  October,  1918,  p. 
10. 

♦  U.  S.  Fuel  Administration,  Publication  No.  6. 


THE   UNITED  STATES 


371 


the  ptir|X)se  of  the  order  was  to  wijx-  out  systematize<l  forms 
of  profiteering.'  To  c.mtinue  in  liusiness,  the  jol.hers  ha<l  to 
revert  to  the  old  practice  of  IcH.kinR  to  mine  o|)erator>  for 
compensation.  A  slight  increase  in  mine  price  was  to  pmvide 
for  operators'  adde<I  expense. 

The  F"uel  Administration  in  its  handling  of  the  coal  situation 
during  the  first  half  of  191 7  committed  the  mistake  of  consid- 
ermg  the  problem  largely  from  one  angle  only,  that  of  price. 
The  sharp  advance  in  price  was  attributed  almost  solely  to 
exorbitant  profits  made  by  coal  mine  owners  and  coal  dealers; 
the  remedy  was  sought  !ii  price  fixing  and  in  the  establish- 
ment of  margins.    Not  until  shijjments  to  Europe  of  foo<|  and 
munitions  came  to  a  standstill.  Iiecause  of  lack  of  coal  at  the 
seaboard  terminals,  and  not  until  the  whole  industrial  war 
program  of  the  country  seemed  t<.  be  on  the  |x)int  of  col- 
lapse,  did  the  question  of  production  and  distribution  of  coal 
assiimc  the  importance  it  shoukl  have  had  from  the  very 
beginning.    \o  adequate  provisions  were  made  during  the 
summer  and  fall  of  191 7  to  stimulate  maximum  output  and 
early  wide  distribution.    Consumers  were  holding  oflf  in  the 
expectation  of  a  fall  in  price  and  they  were  encouraged  in  their 
attitude  by  the  statements  issued  by  the  Fuel  Administrator. 
Things  went  from  bad  to  worse  during  that  part  of  the  \  ear 
when  reserves  should  have  been  accumulated  by  the  users  of 
coal.    In  the  week  of  August  13  production  reached  its  lowest 
point  in  the  year. 

An  unexpected  climax  came  on  January  16,  1918,  when  the 
tuel  Administrator  issued  one  of  the  most  drastic  government 
regulations  brought  about  by  the  war.  The  order  directed 
that  all  factories  east  of  the  Mississippi  river  be  shut  down  for 
five  days  beginning  January  18,  191 8.  The  order  involved 
over  85  per  cent  of  the  country's  steam  plants  used  for 
manufacturing.  There  was  no  advance  notice  of  such  an 
order  and  no  opportunity  to  make  preparation.^  In  addition 
to  the  shutting  down  of  factories,  a  request  was  made  that  for 

'  rZlirr"'-''"^   ''.'"'""{i  Chroniclf.  February  2.v  1918,  p.  769. 
The  Nation  s  Business,  March,  1918.  p.  8.       -■'»••'   t^- 


in 


Kf 


.♦7a 


PRICiiS  AND  PRICE  CONTROL  Dt'RINO  THE  WAR 


M 


U I  wct'ks  on  Monday,  offices,  factories  and  stores,  except  drug 
and  f(HKl  Htores,  use  only  such  fuel  as  wat<  necessary  to  prevent 
damaKc. 

The  New  York  World,  which  on  most  occasions  supported 
the  government,  described  this  order  as  a  confession  of  in- 
competency, as  a  damning  indictment  of  the  Fuel  Adminis- 
tration.  It  pointed  out  thai  "even  Italy,  which  depends  for 
fuel  upon  the  scanty  supply  of  coal  dole<  on\  by  Great  Britain 
and  the  United  States,  has  never  undertaken  to  close  down  its 
industries  in  order  to  save  coal.  Nor  has  France,  where  the 
fuel  problem  has  been  acute  from  the  beginning  of  the  war."' 

The  coal  trade's  main  criticism  of  the  handling  of  the  fuel 
situation  was  directed  at  the  administration's  unwillingness  to 
use  coal  experts — men  familiar  with  the  methods  ot  getting 
results  with  the  least  disturbance  of  the  established  procedure. 

In  a  memorandum  dated  November  12,  1918,  Mr.  Garfield 
gave  the  following  review  of  the  conditions  which  prompted 
the  order  and  of  the  results  achieved.* 

Notwithstanding  large  production  of  coal,  the  "stocking 
up"  for  the  winter  of  1917-18  was  so  unsatisfactory  that  it 
was  evident  in  September,  1917,  that  should  the  country  have 
a  severe  winter  and  shouKI  the  government  speed  up  war 
preparation  faster  than  originally  intended,  an  acute  shortage 
of  coal  was  imminent.  Both  contingencies  occurred.  The 
conditions  in  Europe  up§et  more  than  one  of  the  carefully 
coordinated  plans  of  the  government  leading  to  an  abnormal 
demand  for  fuel.  A  winter  of  rreater  severity  than  the  country 
had  known  for  fifty  years  r'  ed  the  domestic  consumption 
of  coal.  The  railroads  were  ulocked  for  days  at  a  time,  and 
while  consumers  were  near  the  end  of  their  supplies  mines 
stood  idle  because  of  lack  of  cars.  A  marked  slowing  up  in 
the  work  of  the  most  essential  war  industries  took  place.  Pig 
iron  production  was  cut  in  two.  Mills  working  on  ship  plates 
dropped  to  30  per  cent  capacity.  Meanwhile,  in  the  harbors 
of  the  country  hundreds  of  vessels  loaded  with  supplies  for 


'  The  Literary  Digest,  January  26,  1918,  p.  6. 

'  U.S.  Department  of  Labor,  Monthly  Labor  Rfviev,  December,  1918,  pp.  164-167. 


THE   UNITED  STATES 


^73 


the  Allies  and  the  American  soldiers  were  await iiif;  hunker 
coal  and  all  efforts  to  provide  a  supply  proxed  futile.  To  re- 
lieve the  itituation  the  «»rder  was  issued.  The  results  of  it  were 
immediate.  Conditions  improveil  wi  much  and  so  <|uickly 
that  a  sul>sequcnt  order  removeil  the  restriction  after  the 
establishments  affected  had  lHH;n  closed  only  three  of  the  nine 
Mondays  8i)ecihed  in  the  original  order.  Dr.  r.artu  Id  stated 
that  neither  the  severityof  the  remedy  nor  its  suddenness  could 
have  been  avoided.  As,  according  to  his  own  statement,  the 
condition  existed  for  several  wti-k:,  prexious  to  the  issuance  of 
the  order,  one  wonders  wh>-  nothing  had  •H"n  done  to  relieve 
the  situation  l)efore  the  issue  of  the  "drast.v  '  and  "unpn.c- 
dented"  decree. 

Since  the  coal  shortage  in  the  winter  of  1916-17,  efforts 
have  been  made  to  further  stimulate  the  prmluction  of  coal. 
Due  to  these  efforts  the  output  increased  from  590,098,1/., 
tons  in  1916  to  651,402,374  tons  in  1917.  However,  r  uch  of 
the  coal  shipped  to  the  market  during  the  latter  year  contained 
slate,  shale  and  dirt.  To  prevent  as  much  as  possible  the 
shipment  of  such  coal,  the  Fuel  Administrati«m  by  an  order 
effective  June  i,  1918,  prohibited  the  sale,  shipment  or 
distribution  of  coal  which  on  account  of  its  content  of  impuri- 
ties would  Mot  have  been  considered  merchantable  prior  to 
January  i,  »i,i6.  In  case  of  violation  of  this  rule,  50  cents 
per  ton  could  Ix;  dedu(  ted  from  the  government  price  if  the 
coal  had  been  alreach'  loaded  into  cars  or  bins.' 

The  difficulties  eni-iun(»Ted  in  connection  with  price  fixing 
of  bituminou  oal  lay  in  the  di  cntralization  of  the  industry 
as  well  as  in  tie  fact  th,,.  n«»r»"  iy  part  of  the  supply  of  bitu- 
minous coai  comes  from  ni.tf  small  mines  run  in  a  very 
inefficient  manner.  Some  of  tiwse  could  not  be  profitably 
operated  after  prices  were  in-t  *gKEd;  thiv  shut  down.    Sub- 


sequent price  mcreases  mipro^ 
of  demoralization  which  toll, 
its  impress  upon  the  coal  ini 

'  VV.  Notz:  "The  World's  Coal  Si(uatK> 
Economy,  July,  1918,  p.  68i. 


*»e-^itnau.(n,  hut  "the period 

■riginal  pri<  e  fixing  left 

:  ►any  unskillcl  lalx)rers 

ring  the  War,"  Journal  of  Political 


i^-: 


:r-:.. 


V4 


PBIt  KS  AND  l>«U  K  lONTROI    Dl'HING  THK   WAR 


left  thf  «i)al  fiflcln;  hunks  in  »omt'  raiwH  hesitatitl  ti)  finance 
coal  shipnunts  until  the  tliaring  up  of  th»>  qucHtion  of  mancin 
and  rcwilf  of  coal  nurchuM-d  at  high  prict-H.'  • 

While  concentration  rharacterizcM  the  anthracite  coal 
industry,  the  problem  f)f  price  fixing  in  this  industry  was 
greatly  complicated  by  the  varying  percentages  of  Hizes  pro- 
duce<l  by  diflferent  mines  in  the  same  region  and  the  still  more 
widely  varying  percentage  of  sizes  produced  by  the  differc, 
regions.'  In  order  to  arrive  at  Mtme  definite  conclusions  as  to 
what  should  In?  the  h(  ight  of  bituminous  and  anthracite  coal 
prices,  the  Engineers'  Connnittee  was  constituted  in  January, 
1918,  for  the  purpose  of  making  a  general  review  of  costs  and 
of  submitting  to  the  I'nitwl  States  Fuel  Administration  the 
results  of  careful  studies  of  the  costs  of  producing  coal  through- 
out the  country. 

The  committee's  first  work  was  a  studj  <i;  price  fixing  meth- 
ods applicable  to  coal  producing  cemditions.  It  attempted  to 
evolve  a  method  w  hich  would  fill  as  nearly  as  practicable  the 
following  requirements: 

1.  Result  in  a  price  fair  to  the  public. 

2.  Prevent  excessive  prices  or  profiteering. 

3.  Prevent  a  multiplicity  of  prices  in  any  district. 

4.  Encoui  age  legitimate  production. 

5.  Discourage    production    from    inefficient    and    unduly 

costly  operations. 

6.  Insure  to  the  producer  "  the  cost  oi  production,  including 

the  expense  of  operation,  maintenance,  depreciation, 
and  depletion  with  a  just  and  reasonable  profit,"  as 
required  by  the  Lever  Act. 

The  system  of  price  fixing,  as  recommended  by  !■.  com- 
mittee, was  based  upon  a  study  of  the  costs  ''  ined 
from  the  individual  sheets  filed  by  each  operator  with  the 
Federal  Trade  Commission.  These  figures,  with  the  percent- 
ages of  each  cost  in  the  total  prcKluction  of  each  district, 

,,.'  ^i,?^    Anderson:  "Value  and  Price  Theor>'  in  Relation  to  Price  Fixing  and 
War  hinamc,    Amrncan  Etonomkcl  Rnieu'  Supplfmrnt,  March,  1918,  p  ajj 
'  L.  S.  Fuel  .Administration,  Publication  No.  29,  September  20,  1918 


» 


TIIK    tMTKC)  STATKS 


»75 


wi-re  plotted  .,n  diaRram,.  showir.K  graphirally  tht-  ranx..  and 
the  i-xtcnt  of  varia.i....  in  .a.h  .listrict.  On  th.-n,.  diaKra.ns  a 
l)ulk  line  wan  drawn  indi....inK  the  m.un-.,  ,.f  indi.,],,  „sal,le 
tonnage.  This  line  van  on.MemI  a  has.-  to  whi.h  .ho  Fuel 
Administrator  ^.r  r-.liy  ;.,|<l..d  »  „,arnUx  in  hin  ju.lxment 
necensary  for  each   lihtii. -. 

This  methcHl  was  a«Io,,  ..-.i  |,y  •  he  Fuel  Administrator.    With 
'CRard  to  the  lai^.r  situatior.  there  was  a  lack  .,f  CH.nlina- 
tion  l*twtK.n  the  Fuel  Administrati<.n  an<l  the  War  Depart- 
ment.   The  numlx.r  of  lalM.rers  w„rkinK  in  anthracite  mines 
decreased  from   ,77.000  in   19,6  to  ,53.5^,4  i„   ,9,7.     ^^ 
C-     ,eld  had  been  ,H.rmitting  the  depletion  of  unreplaceable 
-u.    .  lK>th  skilled  ami  unskill«|.  without  raisinR  his  voice 
••'''   mt  It.'     Thousands  of  men  left  the  coal  fields  als«,  ,,.r 
more  lucrative  employment.     In  the  bituminous  mines  the 
rouble  has  be.n  largely  .lue  m.t  t<.  the  shortage  <»f  lalx.r  but 
to  the  lack  of  l,Homotives  and  cars  for  tht  '  -..laRe  of  c«,al 
away  from  the  mines.'    This  inadequacy  of  trans,K,rtation 
^c.    .es  checked  pnxluct.on.     It  never  rose  sufftclently  to 
meet  the  neetis  of  the  nation  at  war. 

Just  before  the  conclusion  of  the  armistice  the  Fuel  Admin- 
^stratum  admitted  that  .  was  certain  that  the  enormous 
demands  for  fuel  couM  not  In?  fully  met  by  production.' 

On  February  ..  ,9,9,  the  Fuel  Administration  discontinued 
a  I  price  control  and  much  of  the  super^•ision  over  distribution 
of  coal.  coke,  oil  and  natural  gas.  With  the  passing  of  control 
over  fuel  most  of  the  activities  of  the  Fuel  Administration 
ceased.  Fhe  administration,  howe^er.  under  the  Lever  Act 
can  not  disband  until  jwace  has  Ix-en  declared. 

Coke 
On  x\oveml,er  9.  1917,  ma.ximum  base  prices  for  Beehive 
coke  manufactured  east  of  the  Mississippi  river  were  tixed  as 
follows: 


'A.  J.  Nock:  "The  .Alarming  Coal  Situation  ' 
p.  110. 

'.^tf  ^^^"y  DifH.  February  2\,  igtS.  p  q 
"    huelhact»,"p.  6.  ' 


Thi 


Sation,  August  3,  1918, 


J 


hi 


976 


PRICES  AND  PRICE   CONTROL  DURING  THE  WAR 


48-hour  blatt  furnace $6.00  per  ton  of  3,000  Ib«.,  f.  o.  b.  at  the 

place  of  manufacture 
73-hour  lelected  foundry $7.00  per  ton  of  3,ooo  lbs.,  f.  o.  b.  at  the 

place  of  manufacture 
Crushed,  over  I  inch  in  size $7.30  per  ton  of  3,ooo  lbs.,  f.  o.  b.  at  the 

place  of  manufacture 

Subsequent  orders  established  prices  for  coke  from  various 
plants  in  Alabama,  Colorado,  Georgia,  New  Mexico,  Okla- 
homa, Pennsylvania,  Tennessee,  Virginia,  Washington  and 
West  Virginia.  These  prices  varied  considerably  in  each 
State;  thus,  while  the  price  of  blast  furnace  coke  made  from 
coal  mined  in  the  Big  Seam  district  of  Alabama  was  fixed  at 
$6.75,  the  Empire  Coal  Company's  blast  furnace  coke  in  the 
same  State  was  fixed  at  $10.50.' 

Additional  compensation  was  allowed  for  deliveries  or 
other  services.  Producers  of  coke  at  other  points  than  at  or 
adjacent  to  the  mine  could  demand  a  fair  diflferential  to  com- 
pensate them  for  the  freight  charges.  * 

Maximum  prices  for  by-product  coke  and  gas  coke  were 
established  on  November  17.  For  by-product  coke  they  were 
as  follows: 

Run  of  oven $6.00  per  ton  of  3,000  lbs.  f.  o.  b.  cars  at  the  plant 

Selected  foundry 7.00  per  ton  of  3,000  lbs.  f .  o.  b.  cars  at  the  plant 

Crushed,  over  i  inchage 6.50  per  ton  of  3,000  lbs.  f .  o.  b.  cars  at  the  plant 

The  maximum  price  of  gas  coke  for  industrial  or  metallurgical 

use  was  fixed  to  be  the  same  as  the  price  for  the  corresponding 

grade  of  coke  produced  in  by-product  ovens.'     Gas  coke 

sold  for  household  purposes  was  to  be  sold  at  the  government 

price  for  anthracite  coal  in  the  same  locality. 

On  July  8,  1918,  an  order  was  issued  which  established  a 

more  definite  control  of  gas  coke  prices.    It  gave  base  prices  for 

gas  coke  at  plants  in  those  districts  where  anthracite  coal  was 

not  obtainable  and  in  those  where  it  was  obtainable.    The 

new  schedule  of  prices  for  the  first  districts  was: 

I.  Run  of  retorts $5  5° 

3.  Run  of  retorts  screened  above  1  inches  in  size 0.00 

3.  Run  of  retorts  screened  and  sized  about  1  inches  in  size 6 .  50 

4.  Run  of  retorts  screened  and  sized  between  i  and  i  inches 4 .  50 

>  Price  Fixing  Bulletin  No.  II,  "Fuels,"  pp.  28-31. 
'  C.  R.  Van  Hise:  Conservation  and  Regulation,  p.  151. 
'  U.  S.  Fuel  Administration,  Publication  No.  13,  p.  3. 


THE   VXITED   STATES 


277 


In  those  districts  where  anthracite  was  obtainable  the  price 
of  gas  coke  varied  in  accordance  with  its  use.  In  case  of 
sales  to  dealers  for  distribution  in  less  than  car  lots  or  deliv- 
ered direct  to  consumers  for  household  purposes  the  price  was 
for  coke  screened  and  sized  above  I  inches,  the  same  as  for 
stove  anthracite  in  the  same  locality.  A  25  cents  reduction 
was  accorded  for  size  about  |  inches  and  a  75  cents  reduction 
for  nonscreened  coke.  Prices  for  coke  sold  for  purposes  other 
than  just  mentioned  were  the  same  as  for  gas  coke  in  localities 
where  anthracite  was  not  obtainable.  This  order,  which  was 
superseded  by  one  amending  it,  as  from  August  i  1918 
fixed  also  prices  for  breeze  (to  be  half  the  price  established  for 
run-of-retorts  coke,  unscreened)  and  for  coke  made  in  Ijeehive 
ovens. 

The  order  which  became  effective  on  August  i,  1918, 
contained  among  its  various  regulations  a  statement  that 
commissions  to  selling  agencies  or  jobbers'  margins  were  to 
be  paid  by  vendors  and  were  not  to  be  added  to  established 
prices. 

Charcoal 
The  price  of  charcoal  was  f^xed  on  July  9,  1918,  per  bushel  of 
twenty  pounds,  f.  o.  b.  cars  at  point  of  shipment,  for  lump  in 
bulk,  at  30  cents,  for  lump  in  bags,  at  32  cents,  and  for  screen- 
mgs  in  bags  at  20  cents.' 

Petroleum  Products 
Maximum  prices  for  petroleum  products  which  were  effec- 
tive from  May  20,  1918,  to  July  19,  1918,  applied  only  to 
the  purchases  by  the  Allied  governments.  The  price  for  fuel 
oil  was  5.25  cents  per  gallon,  f.  o.  b.  gulf  ports  and  7  50 
cents  a  gallon,  f.  o.  b.  Norfolk,  Baltimore,  Philadelphia  and 
New  York.  Other  prices  were  for  standard  white  refined 
kerosene,  7.50  and  8.25  cents  respectively;  for  gasoline,  21 
and  23.50  cents,  and  for  aviation  naphtha,  30  and  32  cents. 
'  Price  Fixing  Bulletin,  No.  ii,  p.  34. 


CHAPTER  Vm 
Iron  and  Steel 

The  first  authoritative  statement  regarding  price  fixing  of 
iron  and  steel  products  was  issued  by  the  Secretary  of  War  on 
July  12,  1917.  After  referring  to  the  assurance  of  the  steel 
men  that  their  entire  product  would  be  available  for  the  pur- 
pose of  carrying  on  the  war  and  that  they  were  doing  every- 
thing possible  to  stimulate  an  increased  production  and  speed 
deliveries,  the  Secretary  stated  that  "the  price  to  be  paid  for 
the  iron  and  steel  products  furnished  was  left  to  be  determined 
after  the  inquiry  by  the  Federal  Trade  Commission  is  com- 
pleted, with  the  understanding  that  the  price,  when  fixed, 
would  insure  reasonable  profits  and  be  made  with  reference 
to  the  expanding  needs  of  this  vital  and  fundamental 
industry."' 

There  was  no  upward  trend  in  iron  and  steel  quotations 
until  nearly  a  year  after  the  outbreak  of  the  war;  in  fact,  from 
July,  1914,  to  the  middle  of  1915,  prices  continued  at  the  low 
level  to  which  they  were  carried  by  the  depression  of  19 14. 
Taking  the  relative  price  from  July,  1913,  to  June,  1914,  as 
equal  100,  the  yearly  average  price  of  pig  iron  fell  from  no 
in  1913  to  97  in  1914  and  to  103  in  1915;  during  the  same 
period  the  price  of  iron  ore  declined  f'om  103  to  92  and  85, 
and  the  price  of  coke  from  118  to  88  and  87. ^  The  relative 
price  of  best  refined  iron  bars  was  107  in  1913,  89  in  1914  and 
97  in  1917;  the  price  of  bessemer  steel  billets  117  in  1913,  92 
in  1914  and  106  in  1915,  the  price  of  steel  bars  iio  in  1913, 
91  in  1914  and  104  in  1915.'  Since  the  second  half  of  1915, 
under  the  stimulus  of  war  orc'ei; ,  prices  began  to  rise  at  an 

'"Maximum  Prices  on  Iron  and  Steel  Products,"  American  Iron  and  Steel 
Institute,  November  15,  1918,  p.  7. 

•Price  Fixing  Bulletin,  "Market  Prices  of  Commodities  under  Control,"  War 
Industries  Board,  November,  1918,  p.  3. 

'/6/d.,  pp.  28,  30,  33. 

278 


THE   UNITED   STATES 


279 


accelerating  rate,  reaching  their  highest  point  in  July.  1917 
hJfl  ""^'T  "'"''  '".*•'"  production  of  pig  iron,  coke  has 
frnm  «!  T  '""■""*'  ?T  ""^^uations.  Its  price  advanced 
from  S1.75  per  ton  m  July,  1915.  to  $12.25  in  July,  19,7  or 
494  per  cent  abo%  e  its  prewar  base.  J     y-  '9'  / .  or 

The  most  marked  rise  in  the  price  of  iron  ore  occurred  in 
December.  1916;  up  to  that  time  the  price  of  this  material 
lT2oTnK  V  --P-atively  narrow  range;  it  rose  from 
H20  m  November,  1916,  to  $5.70  in  December  of  the  same 
year,  a  rise  of  53  per  cent  above  its  prewar  rate;  the  price 
remamed  at  th.s  level  through  the  subsequent  months  I^d 
was  contmued  when  iron  ore  came  under  control 

Prices  of  iron  ore  and  of  coke  are  significant  because  of  their 
bearing  on  the  price  of  pig  iron.  Alx)ut  two  tons  of  ore  and 
one  ton  of  coke  are  required  for  the  production  of  a  ton  of 
pig  iron;  thus  ordinarily  the  cost  of  ore  is  a  larger  factor  of 
expense  than  the  cost  of  coke.  ^Vith  the  rapid  rise  in  the 
price  of  coke  during  ,516  and  1917.  the  cost  of  coke  began  to 
bear  more  heavily  on  the  price  of  pig  iron.  However  this 
was  not  as  determining  a  factor  as  may  have  been  expected 
as  probably  only  small  quantities  of  coke  were  purchased  at 
the  high  market  prices.-     The  price  of  pig  iron  advanced  from 

ion^S  'in  ^9^;.  ''''•  ^°  '''  ^^^^'-^  '^"'^^  «^  ^^-5«  ^-  ^^^  -- 
The  prices  of  finished  rolled  steel  products  rose  at  a  more 
rapid  rate  and  covered  a  wider  range  than  either  the  prices 
of  pig  iron  or  of  iron  products.  This  independent  advance 
may  oe  attributed  to  the  limited  capacity  for  making  steel 

StepTnl  ?  "^     '"^  '"■'^'"  *^'P"^  "f  ^"■^hed  products. 

Steel  plates,  m  response  to  a  heavy  war  demand,  led  the 
advance;  their  relative  price  rose  from  97  in  July,  1915.  to 

shee  h./";  '^'^'  ri  '^  ^'-^  '"  J"'^'  '917;  steel  billets, 
sheet  bars  structural  shapes,  steel  plates  and  skelp  rose  alsti 
relatively  higher  m  1917  than  did  pig  iron.  The  rise  of  these 
products  was  as  follows,  like  in  all  previous  cases,  the  a^-erage 

10 


iff 

; 

!  I 

if 


aSO  PRICES  AND   PRICE  CONTROL  DURING  THE   WAR 

of  market  prices  from  July  i,  191 3,  to  June  30,  1914,  being 

ta>:?n  as  100: 

July,  1915     April,  1917     July,  1917 

Steel  billets,  open  hearth 103  344  430 

Sheet  bars,  open  hearth loi  331  464 

Structural  shapes 98  360  434 

Steel  plates,  rank 97  357  7«4 

Skelp,  steel,  grooved 94  *78  476 

While  the  prices  were  soaring,  two  investigations  of  the 
steel  industry  were  being  conducted  in  order  to  determine  the 
iron  and  steel  making  costs  and  by  this  means  to  arrive  at  a 
basis  for  the  ebtablishment  of  a  fair  price  to  he  paid  by  the 
government  to  the  manufacturers.  One  investigation  was 
carried  on  by  the  Federal  Trade  Commission,  the  other  by 
the  Senate  Committee  on  Interstate  Commerce,  in  conjunc- 
tion with  the  latter's  inquiry  into  coal,  oil,  copper  and  other 
costs. 

Not  much  good  was  expected  from  the  work  of  these  agen- 
cies by  the  iron  and  steel  interests,  one  of  whose  apparent 
spokesmen.  The  Iron  Age,  charged  that  the  investigators  were 
not  equipped  to  make  the  investigation  and  were  not  com- 
petent to  say  what  amount  should  be  added  for  profit,  in  view 
of  all  interests  to  be  conserved  in  such  critical  time  as  the  one 
through  which  the  country  was  passing.'  This  periodical 
hinted  that  governmental  price  regulation  might  lead  to  the 
unsettling  of  business  at  the  very  time  when  business  should 
be  kept  prosperous,  and  it  suggested  as  an  alternative  to  price 
control  a  regulation  of  industry  which  would  facilitate  the 
flow  of  material,  thus  permitting  the  fulfilment  of  existing 
obligations.  According  to  The  Iron  Age,  confusion  arose 
from  inability  to  carry  out  contracts  entered  into  between 
producers  and  consumers;  this  situation  could  not  be  remedied 
by  price  fixing  which  would  naturally  apply  to  future  business 
transactions.  While  the  periodical  admitted  that  some  form 
of  regulation  was  necessary,  it  favored  action  by  producers 
under  governmental  sanction  to  direct  action  by  government 
authorities,  the  first  having  fewer  possibilities  of  harm.=     It 

'  The  Iron  Age,  June  28.  1917,  p.  1563. 
*  Ibid.,  July  12,  1917,  p.  88. 


THE   UNITED  STATES 


38 1 


advocated  "that  the  government  provide  sulficien.  transpor- 
m,on  fac.ht.es.  that  it  extend  aid  to  the  erection  of  addit  o^ai 

dX"wUht^"r'..^^^^  '  ^^-^  '  -^  ---  -'i-t 
Althoiigh  it  had  been  advarued  that  the  increase  in  iron 
and  steel  pnces  was  largely  due  to  the  ncrease  in  the  cost  of 
producfon  there  was  in  reality  very  little  relation  between 
^he  two.     The  Un.ted  States  Govern.nent.  private  consumers 

XTdT-'^'"  °'  ^'^  -'"'^^  ™  ^'^^^'"«  agains^Tach 
LZ  7i^7^'"«  P"^^«  "P«ards  irrespective  of  any  costs 
Some  of  the  larger  rnanufacturers  tried  to  stabilize  prices  by 
w.thdraw.ng  from  the  market  except  for  contracts  of  great 
.mportance.  but  this  resulted  merely  in  the  cente  ing  of  the 

pHc?a"dtcr"^^  "^"^^^^'  '''''  --^-'-"^  ^  -•"''^-ie: 
On  September  24.  1917,  the  President  approved  the  *irst 

Tn^The";  ^"'"  '"•"'  T"  '^  '""^  ^^'^  '"d-^"-  liol^ 
.nterests  "^'^r*^*'^!^  ^^  ^'^^i™"  -e,  pig  iron  and  steel 
interests.  The  pnces  became  effective  immediately  subiect 
to  revision  on  January  I    lois      Tt,„  ,.  •  "i^'y.  suoject 

as  follows:'  ^  ^"''''^  ^^^'^  "P°"  ^'^r*^ 


Commodity  gggj^ 

JX""* Lower  Lake  ports 

?.&•.:;::;: conneiisvme. . . . 

sSe^" :::Pittsburgh:ch|cago 


Shapes 
Plates 


Prices  .Agreed  Upon 

5  05  pcrG.  T. 

6.00  per  .\.  T. 

33  00  per G.  T. 

"  .90  per  100  lbs. 


Pittsbur|h.Ch  mIo :  ^  P*'"*  1^ 

pittsburfh-chicafo... •;;.•:;:    lT,^[Zt 

It  w^s  stipulated  that  there  should  be  no  reduction  in  the 
rate  of  wages  and  that  the  prices  should  apply  to  the  pur 
chases  not  only  by  the  government,  but  also  ly  L  A  lies  and 
by  the  general  public.     The  steel  men  pledged  themse" s "o 
exert  every  effort  necessary  to  keep  up  the  production   o  the 
maximum  of  the  past  as  long  as  the  war  should  last 
orde      ^^^'■/;^"'^^"*^^  Board  took  upon  itself  the  .lacing  of 
orde        -,d  the  super^•,s.on  "of  the  output  of  the  steel  mill 
m  su       nanner  as  to  facilitate  and  expedite  the  requiremTnts 
'  Official  BuUetin,  September  25,  191 7. 


■A: 


if: 


lit. 

3  a!.;. 


98a 


PRICES  AND   PRICE  CONTROL   DURING  THE   WAR 


of  the  government  and  its  Allies  for  war  purposes  and  to 
supply  the  needs  of  the  public  according  to  their  public  im- 
portance and  in  the  best  interest  of  all,  as  far  as  practicable."* 

With  the  establishment  of  these  basic  prices  the  iron  and 
steel  industry  was  saved  from  the  intolerable  situation  into 
which  it  had  drifted.  Whether  the  steel  manufacturer^  \\  ere 
merely  responsible  for  allowing  buyers  to  bid  up  the  market, 
without  taking  some  definite  measures  to  prevent  the  move- 
ments, or  whether  they  themselves  took  an  active  part  in 
advancing  the  prices,  is  a  debatable  question.'  The  mistake 
was  m.  de,  and  the  result  of  this  mistake  was  a  market  at  the 
beginning  of  July,  1917,  which  was  vastly  diiTerent  from  that 
which  the  industry  had  always  had  hitherto.  It  was  a  market 
for  early  deliveries.  For  late  deliveries,  even  for  the  early 
part  of  1 91 8,  the  mills  were  not  quoting  and  the  buyers  were 
not  inquiring.'  Only  those  whose  necessities  were  compelling 
them  to  pay  any  price  were  buying.  The  industry  was  seem- 
ingly unable  to  let  down  prices  easily  and  smoothly  to  a 
regular  trading  basis  and  the  things  were  drifting  along  with 
no  alternative  in  sight. 

There  was  some  discussion  as  to  whether  price  regulation 
should  be  made  to  apply  to  existing  contracts.  A  large 
amount  of  material  had  been  contracted  for  at  high  prices  for 
future  delivery.  It  was  pointed  out  by  the  Federal  Trade 
Commission*  that  unless  contracts  for  high  priced  basic 
materials  were  suspended,  the  purpose  of  price  regulation 
would  be  largely  defeated  and  that  a  great  deal  of  inequity 
would  result  because  of  the  differentials  L  price  between  the 
government  price  on  the  one  hand  and  the  contract  price  on 
the  other.  In  a  scarce  market  the  producers  might  also  be 
disposed  to  fill  only  high  priced  contracts,  leaving  no  material 
for  the  open  market  at  the  fixed  prices,  or  they  might  in  mak- 
ing new  sales  at  the  prices  just  fixed  find  difficulty  in  per- 

'"  Maximum  Prices  on  Ironand  Stee\  Products,"  American  Iron  and  Steel Insti- 
tute,j>.  8.  , 

•  The  New  York  Evening  Post,  December  31,  1917,  p.  21. 
'Ibid.,  p.  21. 

*  Commissioner  Davies'  testimony  before  the  Senate  Committee  on  Interstate 
Commerce. 


THE    INITED   STATES 


3»3 


suacl.ng  a  romfH.t.tor  that  he  should  continue  to  pay  S,o  or 
S20  higher  as  stipulated  by  contraet.     The  steel  producer^ 

ctl:  hen  L'  r  "'r  r:  """  ""  ''^^  P^^^  "^  »he  sellers  in 
cases  when  peculiar  hardship  was  worked  by  the  contracts  • 
It  was  also  maintained  that  consumers  would  ga'n  mnh  ne 
and  possibly  lose  out  by  canceling  contracts;  the  product   had 

tracts,  so  that  the  lower  contract  prices  on  the  one  end  would 
mean  a  readjustment  of  selling  prices  at  the  other  I  w^ 
finally  agreed  that  the  price  regulation  should  not  affect  "he 

gt:rnmenT"^"^  ""'''  ''''''  ^'''  '"^'^'^-'^  -  -"^h  tt 
.       The  agreement  reduced  the  prevailing  prices,  according  to 
the  Committee  on  Public  Information,  in  the  case  of=       ^ 
Coke,  from  $16.00  to  J6.00  or  6a.s  per  cent 

S,'cVrb2r^;Smf.'^o?  *^^°°  -  43^^r"cent 
atcei  tjars  from  $5.50  to  J2.90  or  47.3  per  cent 

Shapes  from  J6.00  to  $3.00  6r  50  ^r  c^t 

Plates  from  $1  i.oo  to  $3.25  or  70.5  per  cent 

Fixed  prices,  while  presenting  a  considerable  reduction  over 
current  quotations,  were  on  an  average  8,  per  cc'n  higher 
than  prices  which  pre^ailed  at  the  beginning  of  Ze  Xn 
Judge  Gary  advis..d  caution  and  expressed  the  fear  tiat  here 
u^s  mflation  "^  The  Federal  Trade  Commissionl  op  nion 
of  the  iron  and  steel  prices  was  that  while  they  preventeT  he 

on  oTt'!  "^  """'■?  ^''-'''  '""'^^  ^^-n^th^ned  the  post 
tion  of  the  low  cost  producers  and  enriched  them  by  profits 
which  were  without  precedent.*  prints 

In  finding  cost  i  1  the  steel  industry,  the  commission  divided 

iVon Mwh  u     "^  "'''''  ''''^  '^'  manufacture  of  pig 

^11'  lt\       r   ''  '^^'  ''''''  ''-'"^  ^'"^'^  ^"'•"aces  and  (4)  the 

sT    r     TheT  •; h'?  ^'■"'"'^^^  ^^""^  P"-''-^d  semi-finLed 
steel.     The  I  n.ted  States  Steel  Corporation  belongs  to  class 

'  J**"  ^'■o"  -^K'.  October  11,  1917 

Profiteermg,'  65,h  Cong.  2d  Sess.  Sen.  Do'.^'vV^^^^Vp.  6. 


H 


a«4 


PRICES  AND  PRICE  CONTROL  DURING   THE  WAR 


one.    Its  profits  expressed  in  terms  of  the  total  amount  invested 
in  the  business  showed  net  earnings  as  follows: 


I9I> 4.7  per  cent 

1913 5.7  percent 

1914 3.8  percent 


1915 s.a  per  cent 

1916 IS. 6  percent 

1917 34.9  percent 


T'le  net  income  of  the  Steel  Corporation,  before  deducting 
federal  income  and  excess  profits  tax  in  1917,  was: 

19" J77.075.a17 

1913 I05.3ao,69i 

1914 46,5ao,407 


I9«S $97,967.96* 

1916 394,036.564 

47M 


1917 


1.304.343 


The  federal  income  and  excess  profits  taxes  of  the  Steel  Cor- 
poration for  191 7  were  $233,465,435,  which  left  for  net  income 
$244,738,908.' 

Mills  in  classes  2,  3  and  4  also  made  heavy  profits  in  1917. 
The  commission  gives  figures  for  ten  mills  in  class  3,  w  lich 
showed  the  profits  in  1917,  fluctuating  from  30.24  per  cent  on 
investment  for  Eastern  Steel  Co.,  to  15901  for  West  Penn 
Steel  Co.  and  319.67  per  cent  for  Nayle  Steel  Co. 

The  set  prices  were  no  lower,  on  the  whole,  than  the  invoice 
prices  which  obtained  upon  shipment  made  by  the  large  com- 
panies during  the  second  quarter  of  the  year,  and  upon  which 
they  made  their  record  earnings.'  Price  fixing  scaled  down 
the  quoted  market  and  also  the  prices  realized  by  the  smaller 
steel  producers,  those  who  do  not  customarily  book  orders  far 
ahead. 

Large  producers,  like  Judge  Gary,  E.  A.  S.  Clarke,  president 
of  the  Lackawanna  Steel  Co.,  \V.  S.  Horner,  president  of  the 
National  Association  of  Sheet  and  Tin  Plate  Manufacturers, 
and  others,  whose  opinions  were  canvassed  by  The  Iron  Age, 
expressed  themselves  as  pleased  with  the  set  prices,'  with  a 
few  exceptions,  characterizing  them  as  fair  and  reasonable. 
On  the  other  hand  there  was  a  great  deal  of  public  dissatisfac- 
tion; it  was  advanced  that  the  elaborate  investigations  of  the 
Federal  Trade  Commission  concerning  costs  had  gone  for 
naught  and  that  the  agreed  prices  should  have  been  much 

'  "Profiteering."  65th  Cong.  2d  Scss.  Sen.  Doc.  No.  248,  p.  6. 
•  The  New  York  Evening  Post,  December  31,  1917,  p.  32. 
»  The  Iron  Age,  September  25,  1917.  p.  757- 


THE   UNITED  STATES 


a85 


lower      1  he  comparatiN ely  h.Kh  prices  were  justif,r<|  en  the 

Rround  that  they  had  ,c.  Ik,  fixed  at  a  level  which  w..ul,l  kcvp 

n    ull  o,HTat,on  every  mill  and  1  'as.  furnace  which  con.ril. 


ment  prices: 

IRON  AND  STEEI.   PRICES   I.V    „o,.LARS   PER  GPOSSTOX. 
191 1 


....  .iVfi.      Covt. 

">"  1913  I9»4  for  4       Pricf 

Mesaba  ore,  non-BcMemer           <i  tn    *■,  a.  «.  «  ^''*-  (Sfpt.  H) 

No.  ajoundry  pig  iZTphila:    "  '^    *'  *'  ^^  *°  *'  **5  fvij      h  of 

No.  3%^%  pig  iron  at  Chi-     ''  *'     '*  °^     '*  '■»     '■»"•'     "^^      •"  + 

No.  "*foundo*'pigiron.'cinl     '^^^     ''^'     '*^'     '^^     '*^'       " 
cinnati n  a,     . ,  „, 

BeMemer  pig  iron.  PiVuburgh'.      ^7?      i '^     J^  ??     !^  ^'     •-»».'       •      • 
Ba..cp.g.ron.  valley  furna'ce.     .i^^     j^jj     jj;^?     j^^^     .5.9^      36+ 

On  October  11  maximum  prices  were  fixed  f„r  I.IcKjms.  hil- 
^ts.  slabs,  sheet  bars,  wire  rods,  shell  bars  and  skelp.  and  on 
NovemlK-r  5  or  sheets,  pipe,  cold  rolled  steel,  scrap,  wire  and 
tin  plate.  All  prices  were  subject  to  revisi<,n  January  ,.  ,9,8. 
On  the  recommendation  of  the  War  Industries  Board  they 
were  contmued  unchanged  until  March  31.  19,8  The  fol- 
lowmg  prices  were  agreed  upon.' 

Ba*'*  Price 

Slabs *     ^     Pittsburgh-Jour.gstown l\  .^ 

Sheet  bars.  .  . PittsburghAoungstown 50.00 

Wire  rods .  .  .  Pittsburgh-V  oungstow n ^1 

Piitsburgh e- 


Shell  bars,  1  to  s  in  r>'..  1        1 

n„„,  .  ;„  Q  :_*      Pittsburgh 

sburgh 

sbiirgh 

Skelp,  grooved •    •^!"''{>"'-Kh ' 

Skclp."  Lver^l P!"^''"^Kh t 


Over  5  to  8  in n  "  ,     -. 

n,.„,  ii  .„  ._  •!  t  ittsburgh 

tsbiirgh 

tsburgh 

tsburgh 
.-'fwvip,  universal.  .  .  n***  i         l 

Skelp,  sheared    ......::: C'    'k"''*^ 


o^er^loto  „:;:;; ^i|-rt ::::::::::    i 

Over  10  in P  I    K  '■'^t 4 

keln.  eroovpH  •      Pittsburgh ^ 


00 

57  00 

(Per  100  lbs.) 

3  2S 

.SO 

00 

00 

3.90 

Pittsburgh!!;;.'.'.;;;  ;•■     ^l^ 


ELnrmiTtZ"""  '"'"'"^  '"  '™"  '""^  ^''*'  '"''"''0-."  Quaru-rly  Journal  of 
»  T-A.  Iron  /I «r  October  4,  19,;,  p.  g.,,,. 
Ala.timum  Prices  on   Iron  an.!  Sf..,.l 


r      .,        ..  ~ »—  on   Iron  and  Steel  Produrts 

IK.„IUU.  November  15,  ,9,8.  pp.  8-10. 


I:- 


American  Imn  and  Steel 


386  PRICES    «ND   PRICB  CONTROL   Dt'RlN(i  THE  WAR 

SHEETS 

>r  iooIIm.> 

No.  18  btark  iherti,  f.  o.  b.  Ptitiburah is  oo 

No.  10  blue  annealnt  thecit,  f.  o.  b,  Pititbur|h 4 .25 

No.  a8  galvanixed  thceti,  (.  o.  b.  Pittiburgh i.t$ 

The  above  price*  to  apply  to  both  BcMcmcr  and  open-hearth  grade*. 

PIPE 
On  I  in.  to  3  in.  Mack  mmI  pip* — diacount  .^a  and  5  and  a|  per  cent,  f.  o.  b.  Pitta* 
burgh. 

COLD  ROLLED  STEEL 

17  per  cent  diicount  from  March  15,  191s.  liat  f.  o.  b.  Pittiburgh. 

SCRAP 

F.  ^.  B. 

Coniuming^Point 

(Per  G,T.) 

No.  t  heavy  melting $30.00 

Cait  iron  borings  and  machine  (hop  turning* ao.oo 

No.  I  railroad  wrought 35  00 

WIRE 
Plain  wire,  f.  o.  b.  Pittiburgh l3  >S  pci'  loolbi. 

TIN  PLATE 
Coke  baie,  BeMemer  and  open  hearth,  f.  o.  b.  Pittaburgh . .  .I7.73  per  too  lb.  box 


Schedules  of  differenti'  Is  to  be  applied  to  steel  p  -oducts  in 
more  advanced  stages  of  manufacture  were  gradually  e\olved 
by  the  General  Committee  on  St-  el  and  Steel  i'roducts  of  the 
American  Iron  and  Steel  Institute.  Recommendations  for 
the  adoption  of  such  schedules  were  made  on  November  13, 
November  20  and  December  22,  1917,  and  January  7,  1918. 
It  was  attempted  to  cover  in  these  schedules  all  currently 
quoted  standard  articles.  Modifications  in  differentials  were 
made  from  time  to  time  by  the  chairman  of  the  Committee  on 
Steel  and  Steel  Products. 

In  the  latter  part  of  March,  1918,  the  President  approved 
the  recommendation  of  the  Price  Fixing  Committee  of  the  War 
Industries  Board  that  the  maximum  prices  heretofore  fixed 
upon  iron  ore,  coke,  steel  and  steel  products  should  be  con- 
tinued until  July  i,  1918,  with  the  exception  of  basic  pig  iron, 
which  was  reduced  from  $33  to  $32  a  gross  ton,  and  of  scrap 
steel,  which  was  changed  from  $30  to  $29  per  gross  ton.  In 
connection  with  this  order,  it  has  been  requested  that  new 
contracts  calling  for  delivery  on  or  after  July  i  should  not 
specify  a  price  unless  coupled  with  a  clause  making  the  price 


THK   I'MTKD  XTATEA 


a«7 


•ubject  to  revision  by  any  authorimi  Roxirnment  agrnry 
1  hiH  clau«f  was  inwrtiil  m  that  all  (Uliveri.H  after  July  i 
■houlrj  not  rxcml  the  maximum  priiei.  then  in  ft,ra'.  whatever 
the  (late  of  the  Cf.nclusion  of  the  contract  may  have  In-en  ' 

On  June  21,  1918,  the  Committee  on  St«l  ami  Swvl  PhhI- 
uctH  of  the  American  Iron  ami  Steel  Inntitute  met  in  c.nfer- 
ence  with  the  Price  Fiying  Committee  of  the  War  In.lustries 
lloanL     The  ronferenr-,  was  called  at  the  instame  of  Chair- 
man Baruch  and  the  I)irect..r  of  Steel  Supply  Repl,.Kle  for 
the  purpose  of  obtaining  \iews  of  steel  men  as  t.)  whet'  -r 
changes  in  prices  xvere  desired  an.i.  if  s«..  what  should  Ik-  the 
character  and   the  extent  ..f  the  ( hannes.'     The   pri.,, ,.«,! 
topics  considered  at  this  conference  were  ( 1 )  ihr  ..-M 
age  on  the  fund  <.f  prcnlucers  l;y  .4  jht  cent  ach  an. . 
commodity  rates,  which  was  t<.  take  eflfect  in  th.   hi 
<»f  Jim        >d  (2)  recent  wage  adxancis.' 

A  sche<lule  of  iron  and  stiel  prices  to  remain  in  t 
Sei.temlKT  .v»  was  a.{re.Ml  t.,M)n.     One  of  the  main   iiti 
JH'tween  the  <»ld  and  the  luw  schinlule  was  an  incic- 
iron  ore  prices  from  S5...5  per  gross  ton  for  lower  lak.  i 
*55o.  which  change  became  eflfective July  1.     Thi-      ,.a..ci: 
of  45  cents  per  ton  was  made  to  cover  the  increase  in,  rreight 
rates  from  mines  to  up,K'r  dwks  (33.6  cents)  and  siirh  charK. 
as  spotting  cars,  switching,  etc.,  which  wero  not  Ux  Md  wlun 
railroads  were  f),HTated   by  private  imllNiduals.      '%.•  m* 
agreement  provided  that  in  the  event  of  anv  in.  rea^*  m 
decrease  in  either  rail  or  lake  rates  the  base  pric  iron  on 

were  to  lie  increased  or  decreased  accordingly  on        .lelix 
made  during  the  continuance  of  such  increased  .     decna^.i 
freight  rates. 

Another  exception  to  the  schedule  previously  in  force 
the  discontinuance  of  Chicago  as  a  basing  p<,int.  f<,r  steel  b.u  s 
shapes  and  plates.*     This  was  due  partly  to  the  fact  th.,t 
Chicago  mills  were  loaded  to  their  full  capacity. 
•  Official  BulUlin.  March  27.  1918. 


■n 
il 

'  to 
Hance 


'  f^?'"'^"'"'  and  Financial  Chronicle.  June  32.  iqi8,  p.  j6i  s 


PllCta  AND  PmiCK  CONTROL  DI'IING  THE  WAR 


PitMlucers,  especially  merchant  fv  lace  operatorn,  who  buy 
a  laritc  part  of  their  ore  in  the  open  market,  were  cHssatisficd 
becauM-  the  price  of  pig  iron  was  not  raised.  Some  of  them 
rlaimetl  that  the  costs  of  making  pig  iron  have  mounted  so 
high  an  to  leave  them  no  profit.' 

The  conference  spent  some  time  in  discussing  Willard's  plan, 
under  which  it  was  proposed  that  the  government  should  take 
over  the  output  of  various  producers  i  cost  plus  reastonablc 
profit,  pool  the  entire  production  and,  after  commandeering 
the  government's  supply,  sell  the  remainder  to  private  parties 
at  a  flat  rate.  The  argument  advanced  in  favor  of  this  plan 
was  that  it  would  have  enabled  the  government  to  give  small 
producers  a  fair  profit,  thus  stimulating  maximum  production 
without  adopting  at  the  same  time  a  price  that  would  yield 
exorbitant  gains  for  big  corporations.  No  action  was  taken 
on  this  plan. 

No  advance  had  been  granted  in  the  price  of  finished  steel. 
The  Iron  Age,  in  discussing  the  results  of  the  conference, 
charged  that,  though  approaching  the  conference  with  what 
V  as  said  to  be  open  mind,  the  War  Industries  Board  had 
practi''"''y  determined  in  advance  that  there  was  to  be  no 
increase  on  steel.*  Mr.  Baruch  contended  that  in  all  price 
fixing  arrangements,  the  War  Industries  Board  was  in  a  pot'- 
tion  of  trustee  to  the  public,  that  since  the  government  was 
not  the  only  user  of  steel,  the  board  had  no  right  to  approve 
unnecessarily  high  prices,  counting  on  drastic  excess  profits 
tax»'s  to  reimburse  the  government  for  its  purchases. 

On  July  3  there  was  held  in  Washington  the  first  meeting  of 
representative  manufacturers  with  a  special  committee  ap- 
pointed by  the  War  Industries  Board  to  consider  prices  to  be 
fixed  for  steel  rails,  wire  rope  and  high  speed  tool  steel.  The 
manufacturers  emphailzed  at  this  meeting  increased  labor 
and  material  costs  and  recent  freight  advance.  S^^arp  dis- 
agreements developed  between  them  and  the  governmental 
price  fixing  committee.     Thus  while  a  price  of  $57  for  open 

'  Iron  Age,  June  27,  1918,  p.  1688. 
•  I(nd.,  p.  1687. 


THE  UNITI'    «.,»TK» 


389 


hearth  railH  wan  aiikwl  hy  larRu  prmluciTK  anil  5fto  .y  other 
intere«tii.  the  Kovernmfnt  pn.|K)ml  a  fiKure  much  lower  than 
either  of  these  two.  In  the  cai*  ..f  high  si^hI  tool  Meel  the 
Hteel  makers  declared  that  they  .-ouM  not  accept  the  io.t 
figure*  of  the  Federal  Trade  Commisuion.' 

« !r»m  Alt,  July  11.  1911,  pp.  n,  ,00. 


If 


u 


&. 


CHAPTER  IX 
Nonferrous  Metals 

Aluminum 

On  March  5,  1918,  the  maximum  price  of  aluminum  was 
fixed  by  agreement  between  the  producers  and  the  War  Indus- 
tries Board  at  32  cents  per  pound,  f.  o.  b.  United  States  pro- 
ducing plant,  for  50  tons  and  over,  of  ingot  of  98  to  99  p>er 
cent.'  The  prewar  price  of  aluminum  was  19.71  cents  per 
pound  at  New  York.  The  price  dropped  to  17.59  cents  in 
July,  1914,  and  it  continued  below  the  prewar  level  throughout 
1914  and  during  the  first  part  of  1915.'  War  demands  and 
interference  with  imports  led  to  a  steady  rise  in  the  price  after 
May,  1915,  a  maximum  of  64.8  cents  per  pound  having  been 
reached  in  November,  1916;  this  represented  an  increase  of 
222  per  cent  over  the  prewar  level.  Since  that  date  the  price 
of  aluminum  has  been  in  the  main,  declining.  The  price  of 
32  cents  fixed  in  March,  1918,  was  increased  to  33  cents  in 
June.  The  increase  was  made  after  investigations  into  the 
cost  of  production  by  the  Price  Fixing  Committee  of  the  War 
Industries  Board  in  conjunction  with  the  Federal  Trade  Com- 
mission. The  new  maximum  base  price  became  effective 
June  I,  1918,  to  remain  in  force  until  September  i,  1918. 
Differentials  for  quantity  and  grade  as  well  as  differentials 
for  alloys  were  left  unchanged,  while  those  for  sheet,  rod  and 
wire  were  increased  by  approximately  122  per  cent. 

The  producers  of  aluminum  agreed  first,  not  to  reduce  the 
wages;  second,  to  sell  aluminum  to  the  United  States  Govern- 
ment, to  ihe  Allied  governments  and  to  the  public  in  the 
United  St;  es  at  the  same  price;  third,  to  take  the  necessary 
measures,  under  the  direction  of  the  War  Industries  Board, 

'Price  Fixing  Bulletin,  \o.  I,  August,  1918,  "Price  Regulations  by  Govern- 
ment Agencies." 

» Ibid.,  "  Market  Prices  of  Commodities  under  Control." 

290 


THE    UNITED   STATES 


«-H 


391 


for  the  d.stnbut.on  of  aluminum  to  prevent  it  from  falling 
into  the  hands  of  speculators,  and  fourth,  to  keep  up  the  pro- 
duction of  aluminum  so  as  to  insure  an  adequate  supp^or 

with  n  r"  '?'  "'"  ''■'"""^  agreements  were  concluded 
with  producers  of  copper  and  other  nonferrous  metals. 

Copper 
The  average  price  of  copper  in  the  New  York  market  for 
he  year  just  preceding  the  war  was  15  cents  per  pound.  Due 
to  busmess  depression  in  the  early  part  of  iqu  and  to 
shipping  difficulties  after  the  declaratfon  of  hos't  Hties  th^ 
price  dropped  to  n. 25  cents  per  pound  in  NWmber  914 
Under  the  stimulus  of  enormous  war  orders  priced  Ln 
recovered  and  began  advancing.  The  upward  mo"  iTnt 
received  three  temporary  setbacks,  one  in  the  latter  pa"  of 
1915,  during  the  negotiation  in  this  country  of  the  Anglo- 

fnH""?  T'  r^*'"''  '''^'''  '■"  '^'  '"•'Jdle  and  towards  the 
end  of  1916,  due  largely  to  peace  rumors.  In  March  10,7 
a  price  of  36.25  cents  per  pound  was  reached,  a  rise  of  142  p^r 
cent  above  the  prewar  rate.'  The  advance  was  checked 
through  somewhat  increased  production,  submarine  warfare 
and  anticipation  of  government  regulation 

By  the  middle  of  March  it  was  certain  that  the  United 
States  was  going  to  declare  war  on  Germany,  and  preparations 
were  started.     On  March  23.  Mr.  Baruch.  chairmTn  of  the 
Committee  on  Raw  Materials,  Minerals  and  Metals  of  the 
Council  of  Nauonal   Defense,  announced   that   the  ^opper 
producers  agreed  to  furnish  the  government  with  45.000  000 
pounds  of  copper  at  i6|  cents  a  pound,  for  delivery  extenC 
over  twelve  months  from  April  first.     This  united  action  of 
the  copper  producers  (only  one  of  the  large  companies  having 
refused  to  accept  a  share  in  this  sale)  was  intended  as  a  patri 
otic  demonstration  and  the  price  was  not  justified  on  any  eco- 
nomic principle,  since  too  large  a  proportion  of  the  nation's 
output  could  not  be  produced  for  this  sum.' 

November!T9'?8,  J  Is  *''"^^  °^  ^'°P'*'''"  ^A^O«ar/.r/y  Journal  ofEconomUs. 


m 


I 


p 


292 


PRICES  AND   PRICE   CONTROL  DURING  THE   WAR 


The  price  of  i6|  cents  was  the  average  of  the  Anaconda  sales 
for  the  previous  ten  years,  but  it  in  no  way  reflected  the  cost 
of  production  of  copper  at  the  beginning  of  191 7.  The  first 
consequence  of  the  price  was  public  criticism  that  the  copper 
producers  had  been  making  exorbitant  profits.  It  was  argued 
that  since  the  producers  agreed  to  supply  the  government  at 
l6j  cents,  they  should  be  compelled  to  sell  at  the  same  price 
to  the  AI!!es  and  also  to  domestic  consumers.*  The  buyers 
decided  to  abstain  from  purchasing.  The  price  of  copper 
began  to  decline,  reaching  by  the  end  of  April  2j  cents. 

Negotiations  between  the  government  officials  and  the  pro- 
ducers were  progressing  slowly.  In  April  the  General  Muni- 
tions Board  of  the  Council  of  National  Defense  was  appointed, 
which  arranged  in  June  for  the  purchase  of  60,000,000  pounds 
of  copper  at  25  cents,  but  this  transaction  was  not  approved 
by  either  the  Secretar  y  of  War  or  the  Secretary  of  the  Navy. 
They  wanted  the  price  of  copper  for  government  requirements 
to  be  based  on  the  average  cost  of  production,  allowing  a  fair 
profit  to  the  producers,  both  costs  and  profits  to  be  deter- 
mined by  the  Federal  Trade  Commission.  On  June  30,  191 7, 
the  General  Munitions  Board  was  succeeded  by  the  War  In- 
dustries Board,  whose  function  it  was  to  control  the  produc- 
tion and  distribution  of  all  commodities  essential  to  the  con- 
duct of  war.  One  of  the  duties  of  the  War  Industries  Board 
was  to  fix  prices.  On  March  4,  1918,  this  power  was  delegated 
to  a  Price  Fixing  Committee.  The  board  waited  for  the 
report  of  the  Federal  Trade  Commission,  which  was  examining 
the  producers'  books,  in  order  to  determine  the  cost  of  produc- 
tion. In  the  meantime  uncertainty  prevailed.  The  pro- 
ducers refused  Secretary  Daniel's  offer  of  i8f  cents  and  a 
subsequent  offer  of  22^  cents.  They  were  supplying  all 
government  requirements  without  billing  for  them.  Early 
in  September,  the  War  Industries  Board,  in  behalf  of  the 
Allies  entered  into  a  contract  for  about  77,000,000  pounds  of 
copper  at  25  cents.  The  market  price  of  copper  was  at  that 
time  about  26  cents.     On  September  21  the  War  Industries 

'  The  New  York  Evening  Post,  December  31,  1917,  p.  15. 


THE   UNITED   STATES 


293 


Board  announced  that  by  agreement  with  the  producers  the 
price  of  copper  for  the  next  four  months  had  l>een  fixed  at 
23J  cents  per  pound,  f.  o.  b.  New  York,  this  price  to  apply  to 
everybody,  and  any  violation  01  the  agreement  to  be  followed 
by  governmental  seizure. 

»I.Tl!''  "^^f"^"*;'  >K"«'-e^  contractual  arrangements  and 
all  the  other  factors  m  the  elaborate  machinery  of  the  market 
Jt  became  necessary  to  immediately  create  an  agency  for  the 
control  of  distribution  of  copper.  Such  an  agency  was  or- 
ganized by  the  producers  under  the  name  of  the  Copper 
Producers  Committee.  This  committee  was  sanctioned  by 
the  War  Industries  Board,  which  entrusted  to  it  the  manage- 
ment of  the  business. 

In  January,  1918,  conferences  with  producers  resulted  in  the 
continuance  of  the  agreed  price  until  June  i,  1918.  In  the 
latter  part  of  May  there  was  a  further  extension  to  .August  is 
to  which  the  producers  did  not  agree.'  They  contended  that 
increased  cost  of  production  made  a  higher  price  necessary. 
^n  July  2,  at  a  meeting  held  between  them  and  the  Price 
tixmg  Committee,  the  price  was  advanced  to  26  cents  effec- 
tive  immediately,  to  remain  in  force  until  NWember  i' 

Due  to  far-reaching  concentration  of  the  agencies  of  produc- 
tion and  distribution  of  copper,  the  price  fixing  problems  in 
this  industry  were  essentially  different  from  those  of  most 
other  important  industries  brought  under  control.     There 
were  m  1916  in  the  United  States  348  mines  producing  copper.' 
Of  this  number  the  output  of  31  mines  was  more  than  85  per 
cent  of  the  total,  or,  1,711,395,262  pounds,  while  less  than 
295,000,000    pounds    were   obtained    from    the    remainder 
Smelting  and  refining  show  still  greater  concentration;  as  to 
the  distribution  of  copper,  four  selling  agencies  handled  ini9i6 
almost  80  per  cent  of  all  the  reined  copper  sold  in  this  coun- 
try for  domestic  and  foreign  consumption.'     The  fixing  of  the 
price  of  copper  has  been  simplified  also  by  the  fact  that  the 

.«,  Novemteri9.?p.'9r  ^'""^  °'  *^°'''*'""  ^'"  '^'^""'^  ^'"'""''  "f  ^^"""m- 
'  Ibid.,  p.  76. 
'  Ibid.,  p.  78. 


n 


S94 


PRICES  AND   PRICE  CONTROL   DURING  THE  WAR 


;iir 


quality  of  refined  copper  is  practically  the  same  the  country 
over.  The  only  price  fixed  in  the  copper  industry  was  that 
for  refined  produce,  f.  o.  b.  New  York,  leaving  uncontrolled 
the  prices  for  all  stages  of  production  and  distribution. 

Merciry 

The  prewar  price  of  mercury,  jobbing  lots,  at  New  V'ork, 
was  55  cents  per  pound.  An  irregular  advance  which  had 
begun  in  the  summer  of  1914  brought  the  price  up  to  $1.85  in 
January,  1916;  it  rose  then  abruptly  to  S4.00,  at  which  level 
it  stayed  through  February  and  March,  1916.  This  extraor- 
dinary increase  of  627  per  cent  o\  er  the  price  prevailing  before 
the  war  was  due  to  large  war  demands  and  also  to  the  fear 
that  London  would  cut  down  Spanish  exports  to  this  country. 
However,  enough  quicksilver  was  shipped  to  the  United 
States  to  break  the  market.  A  sharp  decline  brought  the 
price  down  to  S2.55  in  April  and  $1.75  in  May;  the  decline 
c<'  .  inued  to  the  end  of  the  year,  the  price  reaching  a  level  of 
$1.05  per  pound  in  December,  1916.  Growing  demand  for 
quicksilver  for  export  IihI  to  a  rise  in  the  early  part  of  1917; 
the  average  price  during  the  last  three  quarte-s  of  that  year, 
as  well  as  during  the  first  half  of  1918,  was  about  $1.71  cents 
per  pound.' 

The  price  on  mercury  for  government  purchases  only  was 
set  on  April  18,  1918,  at  $105  per  flask  of  75  pounds,  for 
deliveries  at  San  Francisco  for  the  output  of  mines  in  Cali- 
fornia, Oregon  and  Nevada.  Texas  producers  were  to  be  paid 
the  same  price  for  deliveries  at  Marathon,  Texas;  75  rents 
aflditional  per  flask  was  allowed  for  deliveries  at  New  York. 

Nickel 

The  prewar  price  of  nickel  ingot  at  New  York  \v?.s  42.5  cents 
per  pound.  This  price  continued  through  1914  and  until 
August,  1915,  when  the  rate  rose  to  47.5  cents  p^r  pound.  A 
second  rise,  this  time  to  50  cents  per  pound,  occurred  in  Mi  /ch. 


'  Price  Fixing  Bulletin,  No.  i,  .August,  1918,  "Market  Prices  of  Commodities 
under  Control." 


THE    USiTED   STATES 


295 


1  A  f  ^""*'""*^^  »"  be  sold  at  this  latter  price  until  it 
was  reduced  by  government  regulations  in  April.  ,9  8 1 
The  comparative  steadiness  of  the  price  of  nickel  has  l^en  due 
to  the  fact  that  n.ckel  is  not  -leak  with  as  are  other  metals  in 
an  open  market,  hut  is  sold  on  long  term  contracts  (" 
Apr.l  a.  ,918.  the  International  Xickel  Con>pany  Igre  ,  w  h 
the  \ar  Industries  Board  to  supply  the  govlrnment  rc,uirc!^ 
ments  for  mckel  at  the  following  rate..:  electrolytic.  40  "nts 
per  pound    shot.  38  cents  and  ingot.  ,5  cents.'    i^" ^ 

agreement  "''^'  '""^  ''''''  ^■'''-  ""^  -"•^'"-^  '"  "^^ 

Zinc 
The  prewar  price  of  zinc,  pig  (spelter)  \\'estern,  for  early 
delivery  at  the  New  York  market  was  s.35  cents  per  i^'ZJ 

of  22.5  cents  per  pound  .n  June  of  that  year,  an  increase^  of 
321  per  cent  above  the  prewar  level.  This  ad^  ance  was  due 
to  foreign  buymg  and  to  a  shortage  of  zinc  early  in     o  T 

.11'  '"""Tr  """  ^"""^^  '^''  '^'-y  ^'^  overbought  and  the 
pne  receded  to  15  cents  in  X„vend>er.     Then  a  recov  ry 
started.     Large  domestic  buying  and  a  temporary  shortage 
n  New  ^ork  raised  the  price  to  21  cents  in  March    ,0,6 
In  April  It  began  to  drop  again.     The  price  fell  to  abou    9 

sh^hVS  ^T"""^':  '^'^^  ^t  -hich  level  with  comparatively 
light  fluctuations  it  remained  through  the  war.  '^In  Apr  f 

with  Mr.  Baruch  regarding  government  supply  and  fixing  of 
price,  but  the  situation  in  the  zinc  industry  was  such  tha 
there  was  no  reason  for  governmental  reguladon.  Purchase 
of  common  spelter  were  being  made  as  heretofore  on  compete 
tive  bids  and  the  results  were  satisfactory.^  A  maxTmum 
price  for  high  grade  zinc  was  fi.xed  by  agreement  beUv'enr 
zinc  producers  and  the  War  Industries  Board  on  Februa,^  .3, 

undf^'S-ftlo"^  ^""^'"'  ^°-  '•  ^"«"=»    '9'8.  "Market  Prices  of  Commoditie! 
'iM.'  ^^""^  Regulations  by  Government  Agencies." 
•  The  New  York  Evening  Post.  December  3..  1917,  p.  ,5. 


996  PRICES  AND  PRICE   CONTROL   DURING  THE   WAR 

1918;  at  the  same  time  prices  were  also  fixed  for  plate  and 

sheet.     The  prices  were: 

Grade  A  (f.  o.  b.  Eut  St.  LouU) la  cents  per  pound 

Plate  (f.  o.  b.  East  St.  Louif) 14  cent*  per  pound 

Sheet  ((.  o.  b.  Eait  St.  Louia) 15  centi  per  pound 

The  fixed  price  of  I3  cents  became  the  market  price,  but  upon 
a  liberalization  of  the  specifications  new  competition  devel- 
of>ed,  that  of  high  grade  zinc  refined  by  redistribution:'  the 
price  fell  below  12  cents  and  never  reached  that  figure  again. 
Of  the  nonfcrrous  metals,  lead,  tin  and  antimony  have  not 
come  under  price  contro' 

Platinum  Metals 

The  first  statement  regarding  platinum  metals  was  issued 
by  the  Council  of  National  Defense  on  February  23,  1918. 
The  government  took  over  the  control  of  production,  refining, 
distribution  and  use  of  crude  and  refined  platinum  for  the 
period  of  the  war.  The  control  was  entrusted  to  the  Chemical 
Division  of  the  War  Industries  Board,  which  immediately 
upon  taking  over  this  work  sent  out  to  the  industry  requests 
for  inventories  of  the  existing  stock  of  crude  and  refined 
platinum  and  platinum  iridium  alloys.  The  government 
declared  that  it  had  no  intention  of  taking  over  and  handling 
directly  the  stock  of  platinum,  but  that  it  was  in  favor  of 
permitting  shipment  by  the  producers  and  dealers  subject  to 
certain  conditions.' 

On  May  l,  a  requisitioning  order  was  issued  through  the 
Platinum  Section  of  the  War  Industries  Board,  commandeer- 
ing parts  of  the  supply  of  platinum,  iridium  and  palladium. 
The  prices  which  the  government  agreed  to  pay  for  these 
metals  up  to  June  30,  1918,  were: 

Platinum $105  per  Troy  ounce 

Iridium 175  per  Troy  ounce 

Palladium I35  per  Troy  ounce 

A  number  of  other  requisitioning  orders  were  promulgated 
after  May  i.     The  orders  diflFered  from  one  another  in  the 

'  The  Nrw  York  Evening  Post,  December  31,  1918,  p.  18. 

'  Price  Fixing  Bulletin,  No.  7,  October,  1918,  War  Industries  Board. 


THE   INITED  STATES 


297 


extent  Of  their  application.     The  first  order  applied  to  only  a 

the'  hi  H        '^r  ?^  '^'  ""'"''•  ^'"'^  ^'''^  '^^"  -^ors  embraced 
he  holdings  of  a  larger  number  of  individuals.     The  requiS^ 

ad.um  in  the  control  of  or  produced  by  certain  firms,  except- 
ing when  such  m.tals  were  contained  in  articles  of  jewelry  on 
H-hich  the  value  ,.f  the  labor  exceeded  .o  per  cent  of  the  value 
of  the  metal.  The  order  became  effecti^'^on  June  ,o  08 
to  continue  until  December  31.  .9.8.  It  did  not  changlthe 
prices  estabushed  on  May  i. 

mi?!!,!"'^  '  •'  '^'^'  *  ''''"^'*  '''^'  ^"*  °"*  *"  ^'^^alers  to  sub- 

Tf  he  rr  rr?r""^  ''"'^'  '"  '^'''  P^^^^^**'""  °"  the  date 
of  the  receipt  of  the  requisition  of  June  21 ;  subsequent  inven- 
tories were  to  be  provided  on  the  second  day  of  each  month 
up  to  and  including  January.  ,919;  the  inventories  cove^lJ 
stock  acquired  during  the  preceding  month.' 
» Price  Fixing  Bulletin.  No.  7.  October.  ,918.  War  Indurtrie.  Board. 


CHAPTER  X 

Fibers  and  Teztilei 

Cotton 

Upland  middling  rottnn  was  selling  around  13  cents  a 
pound  at  the  outbreak  of  the  European  war.'  Due  to  a  very 
large  crop  and  to  a  temporary  discontinuance  of  exports  the 
price  dropped  to  7.6  cents  in  Novemlier,  1914.  The  cotton 
crop  (without  linters)  was  16,134,930  bales  in  1914  as  com- 
pared with  14,156,486  bales  in  1913  and  13,703,421  bales  in 
1912.  The  total  vorld  production  of  cotton  in  1914  was 
24,764,000  and  the  world  consumption,  17,046,000  bales.* 
The  output  in  191 5  was  for  the  United  States  1 1,191,820  bales 
(a  decline  of  about  5,0(X),ooo  bales  from  the  previous  year) 
and  for  the  world  i8,559,(xx)  bales;  the  consumption  of  cotton 
increased  in  1915  to  19,761,000  bales,  an  increase  of  2,715,000 
bales.  Cotton  in  1915  recovered  sufficiently  to  bring  the 
price  in  this  country  up  to  alx)ut  10  cents  a  pound,  at  which 
level  it  stood  until  October.  1915.  when  it  rose  to  12.5  cents. 
The  fluctuations  in  the  price  during  the  latter  part  of  1915  and 
the  first  half  of  1916  were  insignificant.  The  small  crop  of 
1915  was  repeated  in  1916,  the  output  for  the  United  States 
having  amounted  to  11,449,930  bales  and  for  the  world  18,- 
365,000  bales.  World  consumption  rose  at  the  same  time 
from  19,761,000  in  1915  to  21,011,000  in  1916.  The  price  of 
cotton  began  to  climb  rapidly  upwards,  reaching  by  Novem- 
ber, 1 916,  20  cents  a  pound.  During  the  early  months  of  19 1 7 
cotton  was  selling  at  17.5  cents  a  pound,  but  it  went  up  to  20J 
cents  immediately  upon  our  entry  into  the  war.  The  produc- 
tion in  191 7  was  again  only  11,302,000  bales  for  the  United 
States  and  17,410,000  bales  for  the  world,  with  a  consumption 

'  War  Industries  Bo.?.rd,  Bulletin  of  Monthly  Prices  during  the  War,  November, 
I918,  p.  66. 
»  The  New  York  Evening  Post,  December  31,  1918,  p.  17. 

398 


THE   UNITED  STATES 


299 


«,ual.nK  ^o.,8o.ooo  hales.     Most  c.f  .h.  rest-rves  of  cctton 
om  provous  years  have  been  al.s<.rl.ed  and  cotton  went  up 

rLm^nt'''    '      "  '"''  ''"'■'  **'■""'  "*^-     '"  ^"'«  -f  the 
gmernments   enormous    r«,uireinents    f«,r   cotton,    it    was 

as  It  did  m  the  case  of  iron  and  steel,  copper  and  coal.     Af t. - 
our  entry  into  the  war.  however,  neither  raw  cotton  nor  is 

Zrimer  "•"  r"'"'"'  '"  ^'^'^  ''«*  «^  necessities  in  t 
f2rLT       '  ^"'f  ^':;"^  ^"''  "^•""''•"K  regulations  and  n<. 
restrictions  were  placed  upon  trading  in  either  spot  cotton  or 
in  futures  on  the  -otton  exchanges. 

Cotton  which  in  1914  was  the  object  of  a  government  oroc- 
lamation  to  the  rx..ple  of  the  country  urging  e^e;y    it^n 
who  could  do  so  to  buy  a  bale  of  it  at  .0  cents  per  ,K,und  was 
quoted  at  32.36  cents  a  pound  in  January.  ,9,6      On  Wem! 
Ix-r  3  cotton  sold  on  the  New  V'ork  market  as  high  as  m 
cents  pc-r  pound.     This  price  was  reached  the  day  after  the 
worst  crop  condition  report  on  record  had  been  issued  by  the 
Agricultural    Bureau.     The    forecast,    notwithstanding    in! 
creased  acreage  under  cotton,  which  rose  from  34.925  (xx)  in 
1917  to  37.073.000  in  ,918.  was  for  another  com  partly 
short  crop  of  some  . ,  .000.000  bales.     A  wave  of  speculative 
buying  swept  over  the  Xew  Orleans  and  New  York  cotton 
exchanges.     The  War  Industries  Board  inter^  ened  and  plac^ 
a  maximum  price  of  30  cents  a  pound  on  its  future  war  orders. 
This,  together  with  restrictions  placed  upon  exports  to  neu- 
trals and  with  the  centralization  of  further  buying  by  the 
Allies  checked  the  price  advance,     ('otton  fell  to  32 1  cents  in 
October.  1918.     Planters  and  country  merchants  a!  well  as 
factories  demanded  that  the  government  establish  a  minimum 
price  of  35  cents  per  pound  of  cotton;  planters  also  demanded 
the  closing  of  the  cotton  exchanges.     The  War  Industries 
Board  appointed  a  Committee  on  Distribution  of  Cotton  and 
on  November  ,3  ruled  that  short  selling  be  prohibited  on  the 
New  York  and  the  New  Orleans  exchanges.     Hedge  selling 
agamst  actual  cotton  was  permitted,  but  the  hedger  had  to 


300  PRICKS  AND  PRICK  CONTROL  DURING  THK  WAR 

sign  an  affidavit  proving  ownership  of  the  spot  cotton  hedged 
with  sales  of  futures.  In  December,  1918,  trading  became 
once  more  unrestricted. 

The  domestic  consumption  and  the  exports  of  cotton  from 
1913-14  to  1917-18  were  as  follows- 

Comumptlon  Esportt 

1913-14 3,636,071  9,190,801 

»9I4-«S 5.597.36a  8.544.563 

1915-16 6,397,613  6,191,110 

1916-17 6.788,90s  5.739.009 

I917-". 6.591,3.'  '■  4.4rM>4 

Wool 

The  number  of  sheep  in  the  Ignited  States  has  been  steadily 
declining;  the  decrease  from  1900  to  1910  was  from  61,503,713 
to  53,447,861  or  14.7  per  cent.'  However,  this  dt-cline  has  been 
partially  due  to  the  change  in  the  date  of  enumeration  from 
June  I  to  April  15;  many  lambs  are  born  during  the  interval, 
and  on  many  ranches  in  the  West  the  lambs  are  not  definitely 
counted  so  early  in  the  year  as  April  1 5.  The  census  considers 
that  should  the  enumeration  have  been  made  on  June  i  the 
number  of  spring  lambs  would  have  been  about  19,000,000 
or  20,000,000  instead  of  12,804,000,  as  reported  on  April  15. 
On  the  other  hand  the  number  of  older  sheep  would  have 
been  less  because  of  slaughter  and  death  from  other  causes, 
by  I,  .'tween  one  and  two  million.  In  v  ew  of  these  considera- 
tions, it  is  probable  that  if  the  enumeration  of  1910  had  been 
made  as  of  June  i  there  would  have  been  between  56,000,000 
and  58,000,000  sheep  and  lambs  as  compared  with  61,503,713 
in  1900.  The  number  of  sheep  declined  to  49,719,000  in  1914 
ard  to  48,900,000  in  1918.'  There  has  been  an  evidence  of 
decrease  not  only  in  such  States  as  Vermont,  Ohio,  Texas 
and  California,  but  even  in  the  northwestern  section  of  the 
country,  in  Idaho,  Montana  and  Wyoming,  where  many 
grazing  regions  have  been  overstocked  and  where  the  home- 
steader and  the  farmer  have  been  encroaching  more  and  more 
upon  the  ranches. 

'  Abstract  of  the  Thirteenth  Census  of  the  United  States,  p.  329. 

•  Refertnce  Handbook  0}  Food  Statistic  in  Relation  to  the  War,  pp.  58-59. 


THK   UMITKD  9TATEH 


301 


For  many  years  prcviouH  to  tho  war  the  supply  of  h..mc 
grown  w»K)l  was  entirely  inad«|uate  to  mitt  the  tleman.l;  the 
I  nited  States  has  heen  Impiirting  alK)ut  one-half  of  the  w<k.I 
nmJe<l  ,n  the  pnKliution  of  textiles.'  The  im,,ortati..n 
reaehetl  its  highest  level  in  1916.  when  it  roM-  to  1^4.828  (xk> 
ix.umls  as  compared  w  ith  3"«.()H.V<mk)  in  1915  and  247.649.'.kio 
in  1914:  the  domestic  pnKluetion  durinj?  the«>  years  was 
around  2<j<>|m,<kx>  |K»un.ls.  Im|x.rts  deelinwi  in  1917  to 
372,372.000  pminds. 

The  price  of  wcml  advanced  from  1914  t«.  1918  from  176 
cents  to  47.2  cents  per  iM)und:  at  the  emi  of  1917  it  was  58  3 
cents  T  fK)und.  Price  advances  of  sc.ured  w.h.I  (Ohio/fine 
fleece)  m  the  Boston  market  were'  front  57  cents  in  July 
1914.  to  65  cents  in  F  'y,  1915.  and  76  cents  in  July.  1916- 
the  average  prices  fo.  .^15  and  1916  were  66j  cents  and  77! 
cents  respectively.  A  rapid  a.lvance  in  the  price  Inyan  .lur- 
ing tne  latter  part  of  1916  and  particularly  after  the  I'nited 
States  entered  the  war.  rising  to  $i.69j  cents  in  DecemkT. 
1917- 

When  the  price  l)ecame  stabilized  in  May.  1918.  scoured 
WfK.I  was  selling  in  Boston  at  Si. 81  cents.     The  price  of  w«k)I 
was  established  by  the  Price  Fixing  Committee  of  the  War 
Industnes  Board  after  a  numlier  of  onferences  with  Krowers 
and  dealers.     The  scoured  value  in  Boston  on  July  V).  191 7 
was  taken  as  a  price  basis.     Prices  based  upon  this'  value 
ranged  from  Si. 07  a  pot-nd  for  choice  common  and  braid  to 
Si. 75  for  choice  fine  and  fine  medium  staples.     (Irowers  had 
agreed  to  deliver  the  clip  to  dealers  who  in  turn  had  under- 
taken to  distribute  it  upon  a  definite  compensation  according 
to  priorities  established  by  the  Priorities  Board.     The  govern- 
ment provided  that  it  was  to  have  first  call  upon  any  jx.rtion 
of  w(X)l  It  reriuired  and  could  allot  the  balance  to  mills  manu- 
facturing for  civilian  needs.     Dealers  were  permitted  to  make 
a  charge  of  3  p.,r  cent  of  the  selling  price  if  the  w<m,1  was  not 
graded,  and  3  J  per  cent  if  graded.     This  commission  covered 

'  .Vf'"'*'"'*  "/'.*'  Veparlment  nf  Agricullure,  19 16,  p.  ^o 
n\  ar  Industries  Board,  Bulletin  of  .Monthly  Prices  during 
1910,  p.  72.  '  » 


y. 


m 

i 


the  War,  November, 


p. 


3M 


raiCBS  AND  PRICE  CONTROL  DUtlNC.   IHB  WAB 


gi- 


m 


all  Htoragc,  rartagc  and  innuranrr,  ami  wan  to  be  aiided  to 
the  price  of  the  wool  ait  it  left  the  dealer's  hands.  Dealera  in 
w«H>l  were  to  Ih*  approved  by  the  War  Industries  Board  and 
no  one  not  approved  was  allowed  to  buy. 

VV«)ol  growers,  wool  dealers  and  woolen  'tianufact  ^rers  were 
reprewnte<l  on  a  government  rommittci-  which  took  charge  of 
the  details  of  operation  of  the  order. 

The  government  took  over  the  entire  doiMijc  supply  of 
wool  and  also  Imught  a  considerable  quanti^r  of  imported 
wool  which  it  was  able  to  secure  from  the  British  Government 
at  lower  prices  than  those  at  which  it  bought  the  domestic 
material.  Much  the  larger  proportion  of  the  supply  lK>ught 
by  the  government  was  ap|)ortioned  among  its  clothing  con- 
tractors, the  remainder,  especially  such  grades  as  were  not 
suitable  for  government  needs,  being  sold  to  those  who  were 
manufacturing  for  civilian  use.  At  the  unexpectedly  early 
close  of  hostilities,  the  government  found  itself  in  possession 
of  a  large  supply  of  wool  for  which  it  had  no  further  use.' 


Textiles 

The  price  of  cotton  yarns  dropped  from  an  average  of  22 
cents  a  pound  from  July  i,  1913,  to  June  30,  1914,  to  a  little 
over  16  cents  during  the  last  quarter  of  1914.'  The  lowest 
level  was  reached  in  March,  1915,  when  cotton  yarn  was  selling 
at  14.5  cents  a  pound.  The  average  for  IQ15  was  17}  cents. 
A  reaction  against  low  prices  set  in  during  the  latter  part  of 
that  year  and  the  price  rose  from  17  cents  in  Septemlxr,  1915, 
to  21  cents  in  December.  There  was  an  almost  uninterrupted 
advance  through  1916,  which  brought  the  price  up  to  38J 
cents  a  pound  in  Dccemlier,  1916.  After  a  slight  fall  at  the 
beginning  of  191 7  prices  started  once  more  to  advance,  cotton 
yarn  lieing  quoted  at  63  cents  a  pound  during  the  second  and 
third  quarters  of  1918. 

'  F.  W.  Taussig;  "  Price  Fixing  as  Seen  by  a  Price  Fixer,"  Quarterly  Journal  of 
Economics,  February,  1918,  p.  213. 

'War  Industries  Board,  "Monthly  Fluctuations  of  Prices  under  Control," 
November,  1918,  p.  67. 


TH«  UNITED  tTATK* 


303 


Phf  fluctuationH  in  the  pric-  of  print  ilothH  follou,^|  th«mc 
"f  (•.>tton  yarnH.  The  price  n-M  fr„m  it.  low  levtl  of  ^  . . 
rent-  a  yard  in  Dmmber.  19M.  to  m  rents  in  l).H-emlK.r 
1915.  and  to  5.4  font,  in  iHTimUT.  iyi6.  The  feveri^f,  buy' 
mg  of  1917  aclvanmi  the  price  to  8j  ,vnts  hy  Dece  tilnr  of 
that  year.  The  highest  level  wa«  reatht.l  in  April.  1918 
when  print  cloths  sold  at  13.06  cents  a  yawl.  ' 

The  contn.1  <.f  prices  of  cotton  r.kxIs  U-Kan  on  June  H.  19,8. 
when  the  VNar  Industries  Hoard  ujxm  consultation  with  the 
cotton  manufacture. »  estahli.hiKl  the  following  net  maximum 
prices  on  mill  on  basic  c«)tton  priKlucts: 


48*48 

!t6x6o 
64x60 
80x80 


.Vooyd. 
4  «>y<l. 

4  00  yd. 


•hrrtinK 
•hertiitK 
print  rioth 
print  cloth 


60  c.  jirr  lb. 

70  c.  ijer  III. 

»i  c.  prr  lb. 

84  c.  prr  lb. 


36" 
36" 

3^'t" 

These  prices  t.K,k  effect  on  July  ,.  ,918.  and  were  to  remain 
m  force  until  OvuAn-r  i.  the  terminal  date  later  k-in^  char.Ked 
to  NovemlK-r  16.  They  represented  a  rtnluction  from  «,u..ted 
market  prices  of  about  20  ,ht  cent  to  30  per  cent  and  applied 
tc»  all  primary  civilian  purchases  as  well  as  to  the  purchases  of 
our  government  and  of  the  governments  of  those  countries 
which  were  associated  with  us  in  the  war.' 

In  accordance  with  the  agreement  between  the  represt-nta- 
tives  of  the  cotton  manufacturing  industry  and  the  War 
Industries  Board,  various  differentials  were  fixed  at  different 
dates  for  a  full  line  of  cotton  fabrics.  They  were  based  on 
rather  inadequate  information  and  the  Federal  Trade  Com- 
rnission  was  entrusted  with  the  task  of  c<,lleciinK  and  analyzing 
the  cost  of  production  data,  for  the  purpose  of  permittiiiK  the 
government  to  know  the  situation  better  U-fore  entering  into 
subsequent  agreements.  Besides  cotton  fabrics  and  w«,l.  the 
following  fibers  and  textiles  were  brought  under  control- 
binder  twine,  manila  filler  and  rags. 

tr^t^^J!"""  ^""^""'  •'"'°-  ''  D'^'''""  "f  '-'-"'"K  -'  statistics.  War  Indus- 


Ill 

Hi 


CHAPTER   XI 

Miscellaneous  Products 

Chemicals 
Wood  Alcohol 

Wood  alcohol  was  selling  at  25  cents  giJlon  betwcf  n  July, 
1913,  and  October,  1915.  By  Novembe.  '>:«  5,  i;  began  to  be 
used  for  direct  war  purposes  and  its  price  rose  to  about  .30 
cents  a  gallon.  Because  of  large  export  requirements,  the 
price  continued  to  advance  all  through  1916,  reaching  50 
cents  a  gallon  in  November  and  60  cents  in  December  of 
that  year.  In  1917,  the  demand  was  greatly  increased  by 
our  own  military  requirements  and  the  price  advanced  still 
further.  It  reached  70  cents  in  March,  at  which  figure  it 
stood  until  a  new  rise  brought  it  up  to  90  cents  in  November 
and  December,  191 7.' 

In  the  latter  month  the  price  of  wood  alcohol  was  fixed  by 
an  order  of  the  War  Industries  Board.  This  order,  issued  on 
December  24,  191 7,  commandeered  all  wood  chemicals  for  a 
period  of  six  months.*  It  was  renewed  in  July  for  another 
six  months.  The  price  of  wood  alcohol  was  fixed  at  50  cents 
a  gallon,  f.  o.  b.  shipping  point.  Some  of  the  other  wood 
chemicals  which  were  commandeered  in  December,  191 7, 
were:  acetate  of  lime,  acetic  acid,  refined  alcohol,  pure 
methyl  alcohol  and  formaldehyde. 

Acetate  of  Lime 

Acetate  of  lime  commenced  to  rise  in  price  somewhat 
earlier  than  wood  alcohol.  After  October,  1914,  the  usual 
demands  were  enormously  increased  by  orders  from  Europe 
and  the  price  advanced  sharply,  rising  from  $1.52  per  100 

'War  Industries  Board,  "Market  Prices  of  Commodities  under  Control — 
Chemicals." 

'  War  Industries  Board,  "Price  Regulation  by  Government  Agencies— Chemi- 
cals and  Explosives." 

30+ 


THE   UNITED  STATES 


305 


pounds  m  October,  1914,  to  S4.03  in  October  of  the  fol- 
lowing year,  and  to  S7.03  in  February,  ic),6.  which  was  the 
highest  level  it  reached  during  the  war.  In  October  1917  a 
reaction  set  in,  largely  due  to  heavy  overbuying  in  the  pre- 
vious year-,  the  price  dropping  to  S3.53  per  100  pounds. 
Hn  upward  movement  set  in  again  after  our  own  entry  into 
the  war,  the  price  rising  to  S6.03  in  October,  191 7.  In 
December  the  industry  passed  under  the  control  of  the  gov- 
ernment, which  commandeered  this  chemical  at  4  cents  a 
pound. 

Ammotiia 
^        Until  May,  1916,  the  supply  of  ammonia  was  sufficient  to 
meet  all  demands  and  the  price  remained  at  its  prewar  level 
ot  3.38  cents  a  pound.     The  price  gradually  ad'  anced  to  4..; 
cents  by  June,  19,6.  but  did  not  begin  to  rise    apidly  until 
our  own  entry  into  the  war.    The  increased  use  of  ammonium 
nitrate  as  an  explosive  added  greatly  to  the  demand   for 
ammonia  and  led  to  an  accelerated  upward  course,  ammonia 
st'Iling  at  13.25  cents  a  jxiund  in  November.  191 7.  when  the 
hood  Administration  fi.xed  a  maximum  price  of  8^  cents  per 
pound,  carload  lots.    Ammonia  was  the  only  chemical  whose 
price  was  fixed  by  the  Food  Administration.     The  .Adminis- 
tration undertook  also  to  allocate  the  output. 

Nitric  Acid 

The  price  of  nitric  acid  remained  stationary  until   Tuly 

t'h'^AM-  /  '""'  '^''  '^'■*^^'  ^■""^'■^^■^^  ^*"-  ^'xplnsives  from 

the  Allied  goN-ernments  created  a  demand  for  nitric  acid  far  in 
excess  of  the  available  supply.  Prices  rose  to  8.9  cents  in 
September,  1916,  anr|  remained  at  this  level  until  June,  1916 
when  a  decline  set  in  which  brought  the  price  down  to  6  x 
cents  in  January,  ,917.  Heaxily  increased  production,  which 
<leveloped  under  the  stimulus  <,f  high  prices  and  large  profits 
accounts  for  the  decline.  It  was.  howexer.  only  tLjK.rary.' 
Our  own  war  needs  led  t.)  a  new  acKance.  the  price  ha^•ing 
risen  in  ,9,7  and  in  1918  to  even  higher  levels  than  in  19,6. 
In  October,  19.7.  nitric  acid  was  quoted  at  943  cents  a  pound 


Ji^ 


306 


PRICES  AND   PRICE  CONTROL  DURING  THE   WAR 


II! 


and  in  June,  1918,  at  9.63  cents.  It  was  during  the  latter 
month  that  the  War  Industries  Board  fixed  the  maximum 
price  at  8J  cents  per  pound  to  g  ivernment  and  public. 

Nitrate  0}  Soda 

Practically  all  the  world's  supply  of  nitrate  of  soda  comes 
from  Chile.  During  the  early  months  of  the  war,  because  of 
the  shutting  off  of  the  German  market,  which  normally  had 
consumed  about  one-third  of  the  Chilean  output,  and  because 
of  the  swamping  of  other  countries  by  extra  cargoes  diverted 
to  their  jjorts,  prices  fell  from  a  comparati\ely  low  average 
of  $2.52  for  1913  to  S1.90  cents  in  November,  1914.  More 
than  half  of  the  nitrate  plants  in  Chile  were  forced  to  shut 
down.  The  depression  continued  until  April,  191 5,  when  the 
demand  for  nitrate  in  the  manufacture  of  explosives  began 
to  be  felt.  The  price  rose  to  $2.90  in  December,  1915,  and  to 
$3.60  in  March,  1916.  High  prices  stimulated  production  and 
led  to  an  enormously  incrt-ased  output.  The  price  fell  grad- 
ually, reaching  I2.90  by  October,  1916.  An  increased  demand 
both  for  explosives  and  fertilizer,  combined  with  the  shortage 
of  ocean  tonnage,  started  the  price  once  more  on  its  upward 
movement.  It  went  up  to  $4.73  in  October,  1917,  when,  in 
order  to  curtail  speculation,  a  govern..ient  central  purchasing 
board  was  appointed.  Since  January,  191 8,  the  determination 
of  the  uniform  price,  as  well  as  the  ^\  of  the  distribution 

of  nitrate  of  soda,  was  placed  in  .  ^  Is  of  the  Nitrate 

Committee.  The  price  to  importers  i  .  Cnited  States  was 
based  on  the  average  monthly  cost  in  Chile  and  to  this  aver- 
age price  was  added  a  fixed  charge  of  2.5  per  cent  of  landed 
costs  in  this  country  as  a  brokerage  charge.  This  meant  a 
price  of  $4.23  per  hundredweight  of  95  per  cent  nitrate 
up  to  the  month  of  June,  when  it  was  reduced  to  $4.05.  In 
July  it  was  raised  to  $4.10  and  in  August  to  §4.30^. 

Sulphuric  Aci'' 

There  was  a  steady  increase  in  the  supply  of  sulphuric  acid 
during  1913  and  1914,  and  the  demand,  ".hich  under  normal 


THE    fMTED   STATES 


307 


conditions  conies  chiefly  from  the  fertilizer  industry,  was  not 
sufficent  to  absorb  the  large  output;  the  situation  became 
so  acute  by  January.  ,9,5,  that  many  plants  reduced  their 
operat.ons  and  some  shut  down  entirely.  Sulphuric  acid 
was  selhng  at  one  cent  a  pound,  with  few  opportunities  to  =el 
even  at  that  pnce.  Then  came  a  demand  for  sulphuric  add 
n  the  manufacture  of  munitions  and  by  the  sum.ner  of  ,91, 
this  demand  became  so  insistent  that  a  feverish  productive 
activity  developed.  The  supply,  however,  was  not  sufficient 
to  meet  the  requirements  and  the  price  soared.    Sulphuric  acid 

rose  to  175  cents  m  September,  1915,  to  2  cents   -.  January 
1916.  and  to  25  cents  in  February  of  the  same  year.     By 

tZl'  ?!f'  '^"  T'/'"  *^  '-5  ^^"t^-  ^™"nd  which  figure 
.1  flue  uated  through  the  latter  part  of  ,9,6  and  the  early 

partof  1917.    Because  of  expansion  of  war  requirements  an 
upward  movement  began  in  July,  1^7.  the  prL  rising  to  Ti 

Board  fiLd'    •'"•     '"  J""^'  ''''•  '""^  ^^^-  I" '"«trie: 
Board  fixed  a  maximum  price  on  sulphuric  acid  effective  for 
a  Penod  of  three  months.    It  was  $.8  per  ton  of  .,000  pounds 
1.  o.  b.  works  in  sellers'  tank  cars. 

Hides  and  Leather 

Tol^ir!'^  °^  P^'''T'.  ^^^''^  '^'^^^  ("^*'^'^  steers)  rose  from 

9.4  cents  per  pound  m  July,  1914.  to  25.8  cents  in  July, 

1915.      The  increase  during  the  following  year  was  not  verv 

P^nounced,  the  price  having  advanced^'n.y  .';  Z:7y 

July,   19,6.     Prices  began  to  climb  upwards  more  rapidly 

during    he  latter  part  of  1916  and  in  January.  1917    h  des 

eTt'votthTr^-.'Ji""^^-  ^  ^""'-    '^^   the''time''of  the 
entry  of  the  Lnited  States  into  war  the  price  was  30.5  cents 

rising  again   to   the  January   rate   during   the   subsequen; 

jnonth.     New  high  levels  were  reached  fn  November  and 

It    The'''-  "'r  ''T  "^"  ^^"'"^  ^^-^  35  cents  a 
pound.     The  price  dropped  to  about  32.8  cents  in  January 

and  to  26.25  cents  in  March,  1918.    Hides  were  being  quoted 
'  McntUyS^oftke  V.  S.  Bureau  of  Labor  Statistic,  February,  .9,8.  p.  ,03. 


■I 


3o8 


PRICES  AND   PRICE   CONTROL  UURINO  THE   WAR 


at  32.4  cents  when  the  government  in  agreement  with  the 
hide  interests  stabilized  the  price  on  July  19  (to  become 
effective  August  i)  at  30  cents  a  pound.' 

Differential  prices  were  fixed  for  different  grades  of  hides 
and  all  hides  were  to  be  bought  and  sold  on  a  selected  basis, 
according  to  rules  issued  by  the  Hide  and  Skin  and  Tanning 
Material  Section  of  the  War  Industries  Board. 

The  prices  of  sole  leather  (oak)  did  not  follow  the  fluctua- 
tions in  the  price  of  hides.  While  the  latter  advanced  from 
July,  1914,  to  July,  1915,  6.5  cents,  the  leather  went  up  only 
2  cents  (from  47.5  cents  to  49.5  cents  a  pound).  The  advance 
from  July,  1915,  to  July,  1916,  was  entirely  out  of  proportion 
to  the  increase  in  the  price  of  hides,  the  latter  rising  only  1.2 
cents,  while  leather  advanced  14  cents  (from  49.5  cents  to 
63.5  cents  a  pound),  selling  in  July,  1917,  at  81.5  cents  a 
pound  and  in  July,  1918,  at  83  cents.=  Imported  sole  leather 
(hemlock — Buenos  Ayres  and  Montevideo)  was  quoted  during 
1914  and  1915  at  between  29.5  cents  (August,  1914)  and  32.5 
cents  (January,  1915).'  The  rise  during  the  first  half  of  1916 
brought  the  price  up  to  37  cents,  at  which  figure  it  stood 
from  May  to  September,  a  rapid  advance  occurring  after  this 
date,  which  brought  the  price  up  to  57  cents  in  December, 
1916.  The  highest  figure  was  reached  in  March,  1917,  when 
imported  leather  was  selling  at  59.5  cents,  the  average  for 
the  year  being  53.54  cents.  At  the  beginning  of  1918  the 
price  was  49  cents  a  pound,  and  it  was  this  price  that  ruled 
through  1918,  with  the  exception  of  the  months  of  March  and 
April,  when  leather  was  quoted  at  45.5  cents. 

Following  its  action  in  fi.xing  maximum  prices  on  hides  and 
skins,  the  War  Industries  Board,  in  agreement  with  the  sole 
leather  group  of  the  Tanners'  Council,  established  a  schedule 
of  maximum  prices  for  sole  and  belting  leather  to  become 
effective  on  August  9, 1918.    In  conformity  with  the  usual  prac- 

•  Monthly  Labor  Review,  December,  1918,  p.  11 1;  War  Industries  Board,  Bulle- 
tin of  Monthly  Prices  during  the  War,  November,  1918,  p.  65. 

*  Monthly  Labor  Review,  May,  1919,  p.  14J. 

'  War  Industries  Board,  Bulletin  of  Monthly  Prices  during  the  War,  November, 
1918,  p.  68. 


THE   UNITED  STATES 


309 


tice,  the  prices  were  to  hold  ,or  three  months.    They  varied 
rom  34  cents  for  Buffalo  dry  hide  overweight  to  ^  ^^ts 

and  that  .t  was  anticipated  that  within  the  maximum  pric^ 
the  laws  of  supply  and  demand  would  ha^  e  their  influence 

On  August  14  the  War  Industries  Board  informed  the  tan 
ners  of  upper  leather  that  it  would  insist  on  its  ruling   hat  the 
only  pc.rm.ss.ble  colors  for  the  tanners  to  make  ami       L 
manufacturers  to  cut  after  October  r  were  i,Iack.  medium 
dark  shade  of  brown  and  tan.  mtuium 


RlBBER 

Rubber  is  one  of  a  very  few  commodities  whose  price  has 
not  been  to  any  considerable  degree  affected  by  the  war 

theT?f  "■""''^  °^  'J"'  '"^"^^  P'^"^^»'""  ■•"dustr^•  during 
the  last  few  years,  the  falling  off  of  rubber  imp^^ts  bto 
Germany  and  the  character  of  the  War  Trade  Boa^d  rubber 
allocations  were  some  of  the  factors  responsible  for  hi 
phenomenon..  The  low  level  of  Brazilian  Ywild)  and  Q^^ 
on  (plantation)  rubber  prices  running  throughout  the  perbd 
of  the  war  has  been  broken  by  violent  rises  onb  three  times 
The  first  .mportant  advance  was  that  of  planta.on  rubl,er  in 

n.  ^.hT  """'  "^'^'t  "'•^'  ""^  '"^  *«  ^-^^»  Britain's  dec lar" 
o^r     7  m-  r''""''^"^  ^'  ^^^  '"  ^^^«ber  of  that  year  and 
to  the  establishment  in  November  of    n  embargo  on  rubber 
shipments  from  any  English  ports.    '.  ae  price  of  Ceylon  rub 
ber  rose  from  56.5  cents  per  pound  in  August  to  74.5  cents  n 
December.  1914.  and  to  81  cc     ,  in  January.  191  ^  When  the 
embargo  was  lifted  for  the  United  States  in  January    "o,^ 
the  price  fell  back  to  about  63  cents  a  pound.    The  nex    ad 
v^nce.  both  for  Par.  and  Ceylon  variety,  occurred  t  the" 
atter  part  of  1915  and  the  eariy  part  of  ,916,  the  highest 
^vel  being  reached  in  January,  when  the  price  was  S,  ofa 
pound  for  Ceylon  and  Si.cx,  for  Para.    This  rise  as  well  as  ?he 

'  War  industries  Board.  Price  Fixing  Bulletin,  No.  2,  August,  1918. 


tj 


310 


PRICES  AND   PRICE   CONTROL   DURING  THE   WAR 


i  u 


•.■!!: 


one  at  the  beginning:  of  191 7  was  due  largely  to  the  activities 
of  German  submarines. 

The  first  fixed  prices  of  rubber  became  effective  on  May  i , 
1918.  They  included  only  three  grades  of  rubber,  one  Para 
and  two  plantation  grades,  the  price  for  the  first,  upriver,  fine, 
being  fixed  at  68  cents  per  pound  and  the  prices  for  the  latter 
at  63  and  62  cents.'  This  short  schedule  was  followed  on 
May  14,  1918,  by  a  much  longer  one,  embracing  various 
plantation  qualities,  Mexican  guayule,  Para  grades.  Central 
American  and  African  grades,  P-i.lata,  Gutta  Percha  and 
many  others.  The  lowest  fixed  price  was  14  cents  per  pound 
for  Sarawak  grade  of  Gutta  Joolatang  (Pontianac),  the  high- 
est for  Red  Macassan  Gutta  Percha — $3.00  jht  pound. 
Supplementary  lists  of  prices  were  issued  on  May  29,  June 
13,  July  2  and  July  6,  1918.  All  prices  were  on  the  basis  of 
c.  i.  f.  New  York. 

The  fixing  of  rubber  prices,  as  well  as  the  promulgation  of 
certain  rules  and  regulations  to  govern  the  rubber  industry, 
was  made  necessary  by  the  inclusion  of  crude  rubber  in  the 
list  of  commodities  whose  importation  into  the  United  States 
was  limited  from  April  30,  1918,  until  further  notice.  This 
limitation  of  imports  was  resorted  to  in  order  to  release  every 
possible  ship  for  transatlantic  uses.  The  War  Trade  Board 
feared  that  it  would  invite  hoarding,  speculative  dealing  and 
profiteering,  hence  the  fixing  of  prices  and  the  option  granted 
to  the  United  States  Government  to  purchase  all  or  any  part 
of  the  crude  rubber  at  optional  prices.  The  rubber  importers 
were  not  to  sell,  transfer  or  deliver  rubber  at  prices  greater 
than  those  set  forth  in  the  government  option,  except  such 
rubber  as  they  may  have  been  under  an  obligation  to  deliver 
under  a  contract  executed  and  in  force  prior  to  May  i,  1918.^ 

The  War  Trade  Board  restrictions  permitted  the  licensing 
of  rubber  importations  at  the  rate  of  100,000  long  tons  per 
year,  the  amount  imported  in  1917  being  181,088  long  tons. 
The  cut  in  the  rubber  imports  into  the  United  States  led  to 


'  War  Industries  Board,  Price  Fixing  Bulletin,  No.  2,  .August,  1918. 
•  Ibid. 


THE   UNITED  STATES 


3" 


the  fall  o  pnces  ,n  the  primary  markets  where  the  production 
was  considerably  in  excess  of  the  amounts  allocated  f„r^  I 
ments  to  this  country.    The  maximum  prices  fixe  Hor  ru    J>r 

well  above  the  market  quotations. 

andrmS'"'""  '^"  "'"''""'"  ^""'^  "-^"^^^d  ^'^  '"  -n<^ 

Lumber 
Not  only  were  there  no  important  advances  in  the  price  of 

u^h^s  r?  l'^"  ""'  '^'5'  '^"^ '"  *'^^  --  «f  some  var  et  es 
such  as  hem bck,  gum.  yellow  pine,  the  price  declined  slStiv 

rradva'Le   '''  •'^^"  ^"^^  '^^"^^'  ^'^^  ^-'-^ion  t^, 
Ihe  advance  m  price  commenced  in  the  latter  part  of  .0,6 
especially  for  varieties  demanded  for  war  purpose!   Dou! las 
fir  nsmg  from  $7.50  per  one  thousand  feet  in  .-C   1  fol' ,0 
■n  December..     The  average  price  of  Douglas  fir'forV;,;  was 
5^10.38 ;  It  began  to  rise  more  rapidly  after  the  VniuJ KtZ 
entered  the  war.  the  quotation  reaching  S  8  s^  i n  J  n^^  7 
The  price  of  yellow  pine  rose  from  an  aver.'e  of  Cix^  ner 
one  thousand  board  feet  in  the  first  quarter  of  i^  4'  o  ^,1' 
m  the  second  quarter  and  $35.00  in  the  third  quarter  of  10  7^ 
Beginning  with  December.  ,917,  f.  o.  b.  mills  price  was  e'tlb 
hshed  for  Douglas  fir.    It  was  a  fixed  price  to  the  gremlnt' 
to  L    "J""'  '''  '9'''  r^^'""-"'"  P"--  were  fixed  to  apply 
mbUc'oZTT  u"  *'^'  ^""'  governments  and  to' the 
iS  H  ^,°"'y  !.^'^«  by  manufacturers  were  regulated      The 
anH?if  u    ''f  Government  had  the  option  on  all  contracts 
and  the  ^^  ar  Industries  Board  could  allocate  the  lumber  ekhe 
to  the  government  or  to  other  essential  users.    The  balance 
was  released  for  sale  to  commercial  buj-ers 
According  to  regulations,  wages  and  labor  conditions  in 

I3  7Z  *"  """"  ""^^^"^^^  ^"^  -"t-^ts  entered  into  n 
good  faith  previous  to  the  promulgation  of  the  order  l^re 

.9'.R^ot"'""  ^''''-  «""^''"  °f  ^'-'hly  Prices  during  the  War.  November. 
'  Ibid.,  p.  109. 


h 


3" 


PRICES  AND  PUICE  CONTROL  DURING  THE  WAR 


to  be  performed  in  accordance  with  their  terms,  subject  to 
government  priority  orders.  Maximum  prices  on  Douglas  fir 
ranged  from  $12  per  thousand  for  No.  3  to  $20  per  thousand 
for  No.  I . 

On  January  28,  1918,  maximum  prices  to  the  United  States 
and  the  A:  ied  governments  were  fixed  on  southern  or  yellow 
pine  and  somewhat  later,  in  April,  1918,  North  Carolina  pine 
and  New  England  spruce  also  came  under  regulation.  In 
June,  1918,  the  prices  on  these  varieties  of  lumber  were  raised, 
the  increase  in  the  case  of  yellow  pine  lumlier  being  aix)Ut 
$4.80  per  thousand  over  the  former  government  list  prices. 
The  new  prices  were  approximately  tl.e  same  as  those  ruling 
on  the  market  at  the  time  of  their  establishment.  The  max- 
imum price  of  Pennsylvania  hemlock  was  fixed  in  April,  1918. 
The  price  fixing  agencies  for  lumber  besides  the  War  Indus- 
tries Board  were  the  North  Carolina  Emergency  Bureau  for 
North  Carolina  pine,  the  Southern  Pine  Emergency  Bureau 
and  Alabama  and  Mississippi  Emergency  Bureau  for  south- 
ern or  yellow  pine  and  the  New  England  Spruce  Emergency 
Bureau  for  New  England  spruce.  When  spruce  for  aeroplanes 
became  one  of  the  most  necessary  things,  the  Ignited  States 
Spruce  Production  Corporation  was  formed,  particularly  for 
the  purpose  of  getting  out  spruce  from  the  Pacific  northwest. 

There  was  a  demand  on  the  part  of  producers  for  an  ad- 
vance of  the  maximum  prices  beyond  those  established  by 
the  government.  This  demand  was  not  heeded  even  though 
the  producers  were  able  to  show  a  rise  in  their  costs  of  produc- 
tion. The  maintenance  of  the  unchanged  maximum  was 
announced  to  rest  on  the  ground  that  the  output  heretofore 
maintained  was  no  longer  needed  and  thai  the  industry  should 
be  confined  to  military  and  essential.' 

Building  Materials  (Other  than  Lumber) 

It  is  a  difficult  matter  to  standardize  building  materials 
by  kinds  and  to  show  by  representative  quotations  the  state 

'  F.  \V.  Taussig:  "  Price  Fixing  as  Seen  by  a  Price  Fixer,"  Quarterly  Journal  of 
Economics,  February,  1918,  p.  229. 


THE   I'NITED  STATES 


313 


of  trade  in  these  materials  as  a  whole.    There  are  t«H.  manv 
vanafons  .n  quality  and  the  character  of  the  pro  h."  Its 
the,r  prues  more  subject  to  Una!  conditions  than  a  e 'he  prices 
of  most  other  commodities.    This  is  due  particular  y  to  the 
cos*  of  transporting  building  materials  to  central  1  kes 
In  order  to  make  possible  a  comparison  of  the  general  wio 
buddmg  materials  (other  than  lumber)  with  ofhe  ^r  Z ," 
commodities,  an  index  has  been  c<.nstructed  hv   .h     p 
Section  of  the  VVar  Industries  Boa^uClg't    ?  r^^J^ 
t    he  prues  of  brick,  cement,  glass,  gravel,  ifme.  pa  n    r^ate 
nals.  putty,  rosin,   sandstone  and   tar  fo     the  peri«rra„ 
uary.  .9.3.  to  date.     The  price  of  "Building  MatcXL  "  as" 

ties^Vhufwhi?  '"'  T'f  ^"""^^•^"  ^""  "•^"  C«--^i- 
ties.       Ihus  while  m  the  last  quarter  of  19,6  "F<kh1"  in 

;^  -Fed;  and  l;  ""Sr^o„:i^^'^2:  t:;^^ 

he  nse  m  the  "Metals  and  Metal  Products"  group  foJ; 
times  as  great  as  that  in  the  "Building  Material"  Lun 
^9.7  ^.???^^^^'- -"^--d  in  ,917.  In  the  last !  ua  tTr  o'f 
191 7,  !•  cod  was  83  per  cent  alxne  its  prew ar  base  "  M.t.i 
a»d  Metal  Products."  88  per  cent.  "ATclmSities  8,' 
p:rcr'  ^''^."y^^"^  Materials"  were  only^rCt  4^ 
for  •'  R.  -M        .?'  ^  *7  •^"""""■y-  '918.  was  relatively  greater 

Octobe  '  018  ?t"'^"  ''J^"  '"'■  ^^'^^  «^-P^'  -  *hat  by 
Driver  ;  ^  1  '  '■"P'""''""ted  an  89  per  cent  increase  above  the 
preuar  level    as  compared  with  91  per  cent  for  "Foods  " 

"Ar^orodi^i;^.!^^^^^  -^  ^^'-'  products- and  ^^f. 

The  rise  in  the  prices  of  building  materials  (other  than 

lumber    may  be  attributed  mainly  to  an  advance  in  cost" 

1915" Lrr  '""'^^^^  '"  ^^'"^"^-  «-'ding  operatLst 
1915  ^^ere  ,0  per  cent  above  the  prewar  average,  in  ,916, 

'  Pnce  Fixing  Bulletin,  .No.  6.  .November,  19,8,  p.  ,. 


t'i 


314  P«ICE9  AND  PRICK  CONTROL  Dl'RINn  THK  WAR 

they  were  35  |)cr  cent  alxive  this  average  and  in  191 7,  38  per 
cent  below.' 

By  September,  191 8,  prices  were  fixed  on  Portland  cement, 
building  tile,  sand  and  gravel.'  At  the  time  of  the  fixing  of 
the  price  of  cement,  in  May,  1918,  it  was  selling  at  $2.56 
a  barrel,  New  ^'ork  market,  or  62  per  cent  alxive  the  prewar 
figure  of  $1.58.  Fixed  prices,  to  remain  in  force  until  August 
31,  1918,  applied  to  the  purchases  by  the  United  States  Gov- 
ernment only,  and  ranged  from  $1.60,  f.  o.  b.  plant  location 
for  Buffington,  Indiana,  cement  to  $2.00  for  the  Oswego, 
Oregon,  product.  In  the  open  market  prices  continued  to  rise, 
reaching  $2.90  a  barrel  in  September,  1918.  A  slightly  mcx^i- 
ficd  schedule  was  adopted  by  the  Price  Fixing  Committee  of 
the  War  Industries  Board  on  August  23,  1918,  after  its  con- 
sultation with  the  War  Ser\ice  Committee  of  the  industry. 
The  revised  schetlule,  which  reduced  prices  by  three  cents  a 
barrel,  went  into  effect  in  September,  to  remain  in  force  for 
four  months. 

Prices  for  building  tile  were  fixed  on  July  25,  1918,  on  the 
basis  of  prices  charged  prior  to  July  i  of  that  year.  As  in  the 
case  of  cement  they  applied  to  government  purchases  only. 
No  definite  date  was  set  during  which  they  were  to  remain  in 
effect. 

Prices  on  sand,  gravel  and  crushed  stone  were  fixed,  to  the 
government  only,  on  July  10,  1918,  to  be  effective  for  the 
period  ending  Octoljer  31,  1918. 

Sand- $0.75  per  ton 

Gravel 1 .60  per  ton 

Crushed  stone 1 .85  per  ton 

These  prices  were  for  full  scowload  lots  delivered  f.  o.  b.  scow, 
within  the  lighterage  limits  of  the  port  of  New  York.  For 
deliveries  made  outside  of  these  limits  the  extra  cost  of  towage 
could  be  added  to  the  price.  On  August  28,  the  Price  Fixing 
Committee  established  prices  for  the  States  of  New  Jersey, 
Delaware  and  Pennsylvania  east  of  and  including  Harrisburg. 

'  Price  Fixing  Bulletin,  So.  6,  November,  1918,  p.  i. 
*  Ibid.,  No.  5,  September,  1918. 


THE   INITRD  STATUS  -,, 

These,  prices  w.-re.  f,.r  .leiiverles  in  full  s<c«  load  lots.  f.  o.  b. 

S«nd 

Gravel fc  60  per  ton 

Cruihetl  gravel .  .  .         1  00  per  ton 

I  »5  per  ton 

The  Koyernment  fixetl  the  price  of  sand  Ucause  in  certain 
locaI.t.es  .t  w^H  engaged,  directly  or  through  contrLctors  n 
dock  and  harbor  operations  and  was  therefore  "he  pu  chaslr 
of  all  the  available  sand  and  gravel  in  the  vicinity  '^"'''"•'*' 

Newsprint  Paper 
The  rise  In  the  price  of  newsprint  paper  since  the  outbreak 
of  the  war  has  been  so  great  that  on  April  24.  ,0,6  a  re  '  • 

Federal  1  rade  (  ommission  to  investigate  the  new  pnnt  ,Lh r 
industry  of  the  country.    The  commission  in  a  let.  r    la«I 

higher  thanm  ,9.5and  that  the  average  profits  of  .'of  t  hi 
xx>k  makmg  paper  mills  for  ,9.6  were  1  ^r  cent  more   han    " 

of    h  'pYclerarT  '^  T  ""^^    '"  -"-^"--  "^  the  rej^rt 
Attorncv    r  ?'  Commission  suit  was  brought  byThe 

A  s«al.n  Th?    ''T,"r   ''"'   "^'^^-^   ''""^    .^^anufact'urer^ 
Association    the  so-called  paper  trust.     Many  members  of 

cn?r"  t*;?""'  -^"'  ""^'  '^'^  P^^'^^^l^nt.  under  his  authority  to 
Zt  fi  I  T'  V^  --nuKhties  purchased  bv  the  g  vern^ 
men  .  fixed  the  price  of  print  paper  for  the  Official  ifuledn 
at  2j  cents  a  pound.     Previous  to  this,  in  February      07 

mission  to  hx  a  fair  and  reasonable  price  for  the  sale  of 
newsprint  paper  for  use  in  ,he  I'nited  St'ates."    Such  atrice 

•  C.  R.  Van  Hi.e:  Constnalion  and  Regulation,  p.  37. 


iL 


3l6  PRICKS  AND  MIICB  CONTROL  DURING  THE   >^  AR 

warn  fixed  by  the  commiMion  on  March  3,  but  soon  afterwards 
four  of  the  signatories  to  the  agreement  were  indicated  for 
violations  of  the  Sherman  Anti-Trust  Law.'  On  November 
26  a  new  agreement  was  made  between  the  Attorney  General 
and  certain  print  paper  manufacturers,  according  to  which 
the  price  of  newsprint  paper,  on  all  new  contracts  to  January 
I,  1918,  and  on  all  contracts  in  existence  on  January  I,  1918, 
or  made  thereafter,  was  not  to  exceed  the  following  amounts: 

Roll  n«w«  in  car  lots |j  .00  per  100  poundi,  f.  o.  b.  at  the  mill 

Roll  newt  in  I«m  than  car  lots 3  as  per  i<x)  poundi,  f.  o.  b.  at  the  mill 

ShMt  newt  in  car  lou 3.30  per  100  pounds,  (.  o.  b.  at  the  mill 

Sheet  news  in  leas  than  car  lots 3 .  73  per  too  pounds,  f .  o.  b.  at  the  mill 

This  agreement  provided  that  after  April  i,  191 8,  maximum 
prices  and  terms  01  sale  were  to  l>e  determined  and  fixed  by 
the  Federal  Trade  Commission.  All  interested  parties  were 
invited  to  lay  before  the  commission  any  pertinent  data 
regarding  the  production  and  distribution  of  print  paper. 
The  commission  held  extensive  hearings  and  examined  cost 
figures,  vouchers  and  accounts  of  several  manufacturers. 
The  new  schedule  of  prices  left  the  price  of  sheet  news  in 
car  lots  unchanged;  the  price  of  roll  news  in  car  lot.s  was 
increased  by  10  cents,  while  the  price  of  roll  news  in  less 
than  car  lots  was  reduced  by  2  J  cents  and  that  of  sheet  news 
in  less  than  car  lots  was  reducctl  hy  12]  cents. 

The  following  maximum  commissions  for  jobbers  or  other 
middlemen  were  provided: 

15  cents  per  100  pounds  on  carload  lots 

ao  cents  per  100  pounds  on  less  than  car  lotk 

60  cents  per  lOO  pounds  on  less  than  ton  lots 

These  were  added  to  the  actual  cost  of  paper  at  the  mill  or 
at  the  warehouse. 

It  was  set  originally  that  the  Federal  Trade  Commission's 
award  which  was  made  on  April  i,  1918,  should  last  for  the 
duration  of  the  war  and  three  months  thereafter,  but  the 
findings  and  the  award  of  the  commission  were  appealed  for 
review  to  the  United  States  Circuit  Court,  which  on  Septcm- 

'  War  Industries  Board,  Price  Fixing  Bulletin,  No.  9,  Paper,  October,  1918. 


THE   UNITED  STATES  j,_ 

^mLT'  ''"''"^  "  ''"*'•""•"  '"'"•"«  '^"  ""^«"«  «^  paper 

Roll  new*  in  car  bit 

Roll  newt  in  leM  than  car  lots •■»  S*    per  cwt. 

Sh«et  newi  in  car  loti ....  .^  -fi^Mwr  cwt. 

Sheet  new»  in  Ifm  than  car  bta. 390per  cwt. 

4  o»J  per  cwt, 

Tht.«f  reviscHi  prices.  Iiowcvor.  tlitl  n„t  la^t  xt-ry  Umu      Be 
cauHc  c.f  .ncrea«..s  in  w.khI  ...st.  rate.  ..f  wukcs  an.l  frciKht 
rates,  prices  were  ra  st^  by  the  Fitlfnl    IV.ri..  r         •    • 
twice,  the  last  raise  made  July  ,0.8    h  V'""T'"" 

the  prices  to:  ^     ^     '  ^'   '  '^^""'^  '''""«'''  "P 

Roll  newi  in  car  loti .... 

Roll  newi  in  IcH  than  car  bts >3  7.^1  per  cwt. 

Sheet  newi  in  car  lots.  ...        J  *7l  per  cwt. 

Sheet  newi  in  Icm  than  car  loii 4  LSI  per  cwt. 

4  »7l  |HT  cwt. 


y^ 


CHAP^i!"*  xn 

.inclusions 

Government  price  fixing  during  the  war  was  guided  little 
by  economic  principles.  It  was  not  uniform  either  in  its 
objects  or  in  its  methods,  feeling  its  way  from  case  to  case. 
It  might  be  termed  opportunist.' 

The  fixing  of  prices,  according  to  Mr.  Hoover,  has  not  been 
evolved  out  of  any  desire  to  interfere  with  the  operation  of 
natural  trade  laws;  it  was  "simply  the  result  of  the  govern- 
ment being  forced  into  the  issue  of  becoming  the  dominant 
purchaser  and  thereby,  willingly  or  unwillingly,  the  price 
determiner  in  particular  commodities."  Mr.  Hoover  was  in 
favor  of  price  fixing,  because,  according  to  him,  an  abnormal 
demand  coupled  with  a  shortage  of  supply  produced  a  con- 
dition which  tended  to  oppress  the  poor,  and  government 
control  was  necess-  y  to  curb  speculation  and  profiteering 
which  were  putting  the  necessaries  of  life  beyond  the  reach 
of  the  average  man.  The  necessity  for  control  was  dictated 
not  only  by  humanitarian  considerations,  but  because  there 
was  danger  in  unrestrained  competition,  danger  to  the  se- 
curity of  the  established  institrtions  of  law  and  order,  danger 
from  strikes  by  dissatisfied  labo-ers  and  from  riotings  by 
angry  mobs.' 

The  solving  of  the  question  of  how  low  or  how  high  should 
be  the  price  fixed  by  governmental  decrees  is  of  paramount 
importance.  According  to  President  Wilson's  statement  of 
July  12,  191 7,  the  fixed  price  should  be  sufficient  to  "sustain 
the  industries  concerned  in  a  high  state  of  efficiency,  provide 
a  living  for  those  who  conduct  them,  enable  them  to  pay  good 
wages  and  make  possible  expansions  of  their  enterprises." 

'  F.  \y.  Taussig:  "Price  Fixing  as  Seen  by  a  Price  Fixer,"  Quarterly  Journal  of 
Economics,  February',  1919,  p.  238. 

'Mr.  Hoover's  letter  to  the  President,  March  26,  1918;  Mr.  Hoovers  speech 
before  the  Pittsburgh  Press  Club,  April  18,  1918,  and  his  other  public  utterances. 

3'8 


THE   UNITED  STATES 

It  has  been  continually  advanced  that  a  "fair  nrice" 
mujt  take  cognizance  of  the  cost  of  production,  but  the  cost 
vanes  depending  upon   the  location  of  the   producer    th. 

ment.  etc.  The  fixed  price,  irresp-ctixe  of  any  fairness  or 
just.ce  m  the  case,  must  be  high  enough  to  induce  contlnu^ 
production  of  the  highest  costing  portion  of  the  reS 

luriuppir" '''  '^'^"^'^"^^  "'^"  -^^  ^-^^^ 

The  fixing  of  a  "reasonable"  price,  when  the  supply  of  a 
commodity  .s  not  sufficient  to  meet  the  usual  demTnd  can 
not  prevent  hardships  and  dissatisfaction.  Price  fixing 
alone  does  not  solve  the  problem  of  keeping  the  poo   provi'd^d 

Ta  e  thTr'  •'■";  '■"  ^'^''  ''---able-Vicer^ay  a^gt 
l^''  the  situation  by  giving  people  of  means  an  incentive  and 
an  opportunity  to  acquire  ahead  of  their  actual  needs   thus 
leaving  the  less  fortunate  ones  without  any  supply     U„,ess 
intT^lS'"  ""'  '"''■''''  "'  ''■^^"''"^'-  -d  orrationin? 
Sure        """"'""  ^"''  """''  ''^'"^'  '""^ '-«-  -  doomed 
The  fixing  of  the  whole  chain  of  prices  from  the  producer 
of  the  raw  material  to   the  retailer  involves  the  fixing  of 
margins  for  manufacturers  and  middlemen.     The  dS  on 
the  one  hand  to  stimulate  production  and  on  the  ot^r  to 
satisfy  public  demand  for  lower  prices  led  the  government   n 

talr  ZToT  ?h-"'  *'^  ""'T  °'  '""^  ^^^^'-^'^  -"  >■ 
coal  and  a  few    L      ''^'  '"""f.    "'^  '^°"^'  ^"^^'■'  l^ituminous 
case  nffU    r  "  ^"'"'"odities.     The  harm  done  in  the 

case  of  the  first  two  articles  was  not  very  ^eat   as  JJZ 
couM  afford  to  sell  some  things  without^p^r'arCgT 
oil  the  sTtu'aT "  '""J-f  '""    ''''*'  ^'^^'^  ^°  f^'tuminou 
ness  IS  ln^olved.    Too  narrow  a  margin  lessened  the  interest 
of  coal  distributers  in  their  work.     It  has  been   advanced 

in;;'&«:;;;^StIyiV'9^7l'p.y.'  '"^'^^^^'"'  Governmental  Price  Fix- 


fii 


3» 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


that  "if  the  jobbers  in  bituminous  coal  had  beon  more  sure 
of  their  ground,  had  had  freer  hands  and  larger  margins  to 
work  on,  no  small  part  of  the  railway  congestion  from  which 
the  country  had  suffered  so  much  in  the  winter  of  1918  might 
have  been  avoided."' 

The  experience  with  price  regulation  during  the  war  has 
shown  that  prices  can  be  controlled  without  giving  rise  to  a 
great  deal  of  evjision  and  without  too  much  running  counter 
to  the  competitive  spirit  which  animates  our  industrial 
society  when  a  great  emergency,  like  the  recent  war,  fires 
public  imagination  and  inclines  public  opinion  to  favor  any 
measures  which  are  likely  to  advance  the  national  cause. 
The  best  methods  of  control,  however,  are  those  which  enlist 
the  cooperation  of  the  people,  whose  interests  are  to  be 
affected  by  price  regulating  measures. 

>  B.  M.  Andenon:  "The  Price  Fudi^  rolicy,"  tjrpewritten  manuscript,  p.  4. 
(Report  of  the  Committee  of  the  American  Economic  Aaaociation.) 


APPENDIX  TO  PART  II 


i 


A  List 


.  >9I7 
Auguct 
September 

October 

November 

December 

1918 
January 
February 
March 
April 

May 
June 
July 


Of  Commodities  the  Price  of  Which  Was  Brought 
tmder  Govermnent  Control' 

Coal,  bituminous  and  semi-bituminous 

«I;el  pte'wi,™t"'=  ""'"^  """  "^"-"-^  '•-=  -"  0-=  P«  iron; 

Steel  billets  and  blooms;  sheet  bars;  wire  rods-  skpln-  ...„,,.  .,  j- 

r^\,l7\"'"  '">"  pip-:  Bteel  rail,;;*;e  tCTplate' Lmonik^"^'"'* 
Douglas  fir;  ammonium  sulphate  "mmonia 

7^i;?*!»f '?''k'=  Y«"°»-.Pine;  acetic  acid;  nitrate  of  soda 
Z  nc  sheet;  binder  twine;  castor  beans;  castor  oil 

HeXrwhff^  rln^''  "•°'*'*''  ('-"POrt-^d)  manila  fiber 

"o'^'rm'unU?riiCr;;^Sacr  =  ""'''■'""'  "»'*'=  -"«— 

Portland  cement  (domestic);  hides;  rubber;  wool 

Harness  leather;  prunes;  raisins;  sulphuric  acid;  nitric  acid 

Sole  leather;  glycerine;  dynamite 
Cottonseed  meal  and  oil;  wool  grease 


August 

September 

October 


323 


m 


ladaz  If umb«ra  of  Controlled  and  OncontroUtd  PricM  of  all  Commoditits  by  ICoBtho,  Angnat,  1916, 
to  8«ptoinb«r,  iqiS.    Avcrago  Pitecs  for  tfao  Your  Auguat,  1916,  to  July,  I9i7>  100' 


IM 


160 


lfl»6      I lfll7 


I 


60 


40. 


I    I    I    I 


SS  S  18  I 


SIM 


.  ■■  ,     J910  ■ 


11M 


I    r    A    I    I    i    I    I    I 


1916 


_l — I — I    I   1    I    I   J    I    I    I 


1917 


izo 


160 


MO 


100 


80 


60 


J — I — i I I I '    1    I    «    '    Ijji 


1916 


1 


>  War  Industrie*  Board.    "Fluctuatioiw  of  Controlled  ■nd  Uncontrolled  I^cM." 

334 


Official  U.  S.  Food  Bulletin 


F*rlb. 

to  J3C 

to  i6c 


to  aoc 
to  asc 


Coniuaer 
Should  Pay 


Per  lb. 
3ac    to  3(c 
>4C    to  jtc 


RctaUtr 
Pkyt 

„  Dry  picked— 
Fiwh ... 

Heiu  and  chi-keiu— 

.MSii'fc;S3f.ior.'^=  ""*'  '♦=  «»••« 

■ge lie 

4iteslb.,frc(h....aje 
41  to  5  lb.,  cold  Mor- 

„••»...., i»c 

Jo<w«n,  ficah  . . . .  i8c 

Ducki 

CtCM 


i»c 
MC 


to  asc 

toaoc 


■  asc 

aoc 


Per  doi. 


to  aoc 
to  aoc 
to  aye 
to  aac 

SI,UUyFre.h-         **^*^ 

Candled— 
Extimi,  approz.  34 

C^sl^at^ '" 

Candled— 
Extraa.  approz. 
„»3oa..perdo«. 
No.  I,  approz. 

aa  oa.,  per  doi 

Note— El 
pilcet, 

,^  ,  HAMS 

to  Iba.  to  la  Ibi.  av- 

ulSTtotSliikvl^'^    "'^»« 

•"«• aejc  to  3o|c 

„-    ,      ,  BACON 

Whole  piece*-         Per  lb. 

fSiiS?''" 4ac    to  44c 

"•"'»"> 37c    t0  3«c 

LARD 

Beat  kettle  rendered-^  ""■ 

tSfn?"' "e    toa«Jc 

Standard  pure — 

"■^feute;::  ■'*»■='»"«« 

"bulk aac    to  asc 

,                  COOKING  OILS 
r--.™*^!"^  Per  can 

Com  oil  pinta ajc    to  30c 

£°™  °!L3i"«"» ,,  •  SOJc  to  5<4c 
Cottonaeed,  amall . .  a8c    to  Sac 
Cottonaeed.  med . .  .  s6c    to  6310 

RICE 
«■-       .      .  _  Per  100  lbs. 

SS^yhead 18  7sto|io.oo 

BlueRose 8  00  to     9.00 


aoc 
a7c 
aac 


to  asc 
to  asc 

to  sac 
to  a7c 


Perdoa. 


to  54c      S3C    to  S9C 


.36Jct0  39jc    37jct0  44jc 

3SC    to  37c      38c    to4ac 
gsa  in  cartons  ic  per  doien  above 


Per  lb. 
33c    to  37c 
3I|C  to  3Sic 

Per  lb. 
4SC    to  soc 
40C    to  44c 


Per  lb. 


3IC 
30c 


to  36ic 
to  3sc 


age    to  34|c 
a4ic  to  31C 

Per  can 
30c    t0  37|c 
SoJc  to  70c 
3<ic  to  40c 
63c    to  70c 


Per  lb. 

I0ictOI4C 

IOC  to  13c 
POTATOES 
Per  100  lbs.  Per  pk.,  ij  lbs. 


No.  1  Wisconain. 
Minnesota  and 
''•kota Ii. 85  to  la, 10 


33c  to  39c 


Conaumer 
Should  Pay 

Per  lb. 

7|c  to  81c 


Jbri la.«l^t'o^a'70     U.l^\^,., 

(?,i  'M«»  '36   ..4ato  ,:; 


Reuiler 
Pays 
SITGAR 

Gimnulated  in  bulk  $^"4'^  Irj 

/.ir  ..  u  FLOUR 

^Well  known  advertised  mill  brands  in  cotton 

Per  bag  Per  baa 

ola.Bs 

Graham — Pure-^"""       ■" 
Inslb.  bags.  .  .  .a7»to     ,30 
RYE  FLOUR 
n  t.     ,  ('»  cotton  bags) 

Bohemian  sty..  Per  bag 

mtol.J  brl.|i. a?  toll. 33 
Dark,  pure,    ) 

b}A t.iajtoi.aa 

Bohemian  sty., 

mlzed,  sibs..     .ao  to    .30 
Dark,  pure,     5 

">• a6Jto    .agj 

CORN   MEAL 
tin...     .....  .^'  '00  lbs. 


Etapariuft- 

(unsweetened) 
Comdenifd — 

(swt?i.cn-u> — 
Highest  grades .  . 
Medium  grades. . 


it 


Perb« 
II.3S  to|i.4s 


i.aoto 


JS 


.3a  to        .JO 

ag  to 


80  to    6 . 
MiLK 

i  er  can 
"|c  to  lalc 

■isle  to  I7|c 
•  141c  to  15  Jc 
BUTTER 
Per  lb. 


U 

Per  lb. 
6c    to    6ic 
6c    to    7c 


Per  can 
13c    to  ISC 

i6c    to  aac 
I61c  to  iSic 

Per  lb. 
48JC  to    S3jc 
44K  to    SOC 


Crtanury —  .  ^,  ,„ 

Extras  fresh.  tub8.47»c  to  48)c 
^'"t^. '■«>>.  tubs.. 43lc  to  isi 

cold  storage 41c    to  43c      sic    to  ••■^ 

Note-ic  higher  in  carto„rthan  tSbs.     ^^^ 

<;/».w«.j  r-   OLEOMARGARIN 
ilandari  Cradu —        Per  lb 
In  cartons .  .  age 

'.5  ■?."•>;        "c 

Mtdtum  Grades — 
In  rolls  and  bulk . 


to  30c 
to  age 


a6c    to  aSc 

BEANS 

XT        L     J  ''"='■  loo  lbs. 

Navy,  hand- 

,,P'"^''«1 »iS.5oto|i6.50 

"■"a IS. 00  to    16.00 

r-  ...      .  PRUNES 

Californta — 

Santa  Clara—  I 

so  to  60  prunes,  per 

'? ii|c 

60  to  70  prunes,  per 

"> loic 

g'    to   100    prunes, 

per  lb 5jc 

iiOMir.v 

,_  .    ,.  ,  Per  100  lbs. 

'"bulk Is  so  to  16. 00 


lb. 


Per  lb. 
3ac    to  3sc 
31C    to  34c 

age   to  33c 
Per  lb. 

I7ic  to  ao)c 
■  7c  to  aoc 


Per  lb. 


to  13c 

to  iijc  13c  to 

to  ZOC      I  IC  to 


13c  to    17,7 


I6c 


325 


Per  lb, 
6c  to    7c 


3a6 


PRICES  AND  PRICE  CONTROL  DURING  THE  WAR 


Ofldal  U.  S.  Food  BuOMa—CoiHinutd 

CHBBSE 

American,  (ull  <  irtia. 


whole ite  to  JK      J4C    to  40c 

American,  full  craam, 

cut  to  ordrr   aSc  to  ]K      sic    to  40< 

Aiacrlcan.  full  cream 

brirk.  whole igc  to  Jic      uc    to  J«c 

American,  full  cream. 

brick,  cut  to  order  jgc  to  jic      jAc    to  4JC 


SALMON 
CoiiW  Saimon— 

i-tb.,  tall  can* —       Per  dot.  Per  can 

Pink     Ii.ojtola.io     igc    to  ajc 

RedAlaaka J. 71  to    a.ss    >Tc    to  jje 

SYRUP 

Per  dot.  cane       Per  can 
Corn,   «o%    and 
cane  10%  mix- 
lure |i.4l»  to|i.s»t    ijc  to  I7C 


riSH—lhtn  are  heavy  runt  o(  blue  back  herring  and  ciico.  The  herrini  ate  coeting  rrUllera 
(  to  10  cent!  per  pound  and  ciico  li  to  14  cenn  per  pound.  Theie  are  good  n»h,  and  the  cleco 
MpeclaUy  are  very  palatable.    Try  the»e  fleh  tor  Friday.      „  ^  ^  .... 

^Deliwry  ecrvlce  U  expeniive.    Carry  your  goodt  home  U  you  can  and  do  not  eaact  more  than 

H  you  carry  food*  home  you  are  entitled  to  le«  than  the  hlfheet  pricet.  ,    .    ^        „ 

Many  grocen  have  Inaugurated  a  •yeleni  o(  charging  5C  per  delivery.    ThU  U  a  iu«t  charie  II 

iST quoutioni  are  for  high  grade  gooda  uiUeer  otherwiae  atated.  tf  you  pay  hifheat  pricea  you 
are  entitled  to  high  quality. 


iin>Bx 


*^"^°f  io7 '"  '•'  =    '^  luctuMlon..  3041 
Anicultuml  hboRn  (U.  S.),  warn  loA 

control.  JOS,  igo-agi.  '^' 

a2S!3"  '?l?"'?\«»rty  eondltloni.  in. 

*r„?s!r,,<.V;3Si'.'  '^"  '"«"»»^".  io»i 

Animal  food  (C.  8.),  piict  fluctuatiom  ii-k 

Auitimlla,  droutht  o(  1915.  so. 
Bacon: 

■.\Kl~    "^  fluctuatloni,  i«j,  190. 

Baruch,  Bernard  M.,  J04,  iS7-]t8,  loi 

■wvan.  102. 

BlndCT  twjiw  (U.  S.).  control,  joj. 
1  "L^  ^'?«'*  Committee  on  Pricea  (C   B  )• 
inve«i„ilon..  66;  power..  io«  *    '  "'• 

•^rpIS^,;',?  '^'  "■'■■    """»  O-ctuationa. 

°°^'"ofriS;^in^-.!l=    '•'"•    ""   ""v^nwnt. 
cauae  ot  nw  in  prices,  37. 

"'tion.V»,!?!Sfl'2!'S?."°--  "•  •"*«  «""■»• 

*^i?:.''    E!?«  Owituatlona.    loo.   ijs-216' 

?3^XnSj'^,^?  "*  ^°°i  Admim.?iujS; 

Brici?li;.f;!^i?il:Jjr'**- 

Bronie  (&  B.).  iuuea.  ^ST 
Buffalo,  wlwat  pricea.  aj4. 
Bui  d^ng  matorial.  (U.  s5:    price  fluctuation.. 

313-313  control.  314-3IC. 
Butter:  ^  ' 

(U'  Sii    Sri^  auctuaUpna.  .«:  control.  136. 

'  ™;'  1  *'"'*  """uatlona.  i8s.  190,  .so- 

control  ai3.  .59;  profit,  j^'-     »"■  »59. 

Buying.  recklcM,  47. 

Caltbrop.  6uy.  147. 

Cannan.  E..  63.  6s.  84. 

Cjnned  good.  (U.  S.),  control,  .13. 

.sf-asS.       ""«*'«"'<»••  »«5;  ptoduction, 

^^".JJJSL"',*  ^i!!f*'".''""^=  inflation  of  cur- 
SSh^^^  J?*""=S'°"  of 'uPPly  and  intenal- 
Iton.  45;  recklen  buying.  47;  higher  coat  S 

tie.,  4»;  high  freight  and  Inmirance  rate.  <8- 

S^bn^'=J!r-H'r.i'2.s^'''."!""?''5' 


J«W8t«ering.  64;    higb  wage..  8a;  demand, 
of  government.  104;  panic  conditi<^  104^ 


r!2!?*/i'  S  '■  ""tfol.  aos. 
cSS^  ?it"«';  '^J'  Juctuatlon..  19. 
cKtr  luctuationa.  jjt. 

(G.    B.):    showing  ri«  for   igii-1017    lo- 

''M^-g£n.:'Si'n.-r,"^.5S2L"r'r."^ 
«ipr.  .44;  Indea  number*  of  controlterf 
and  uncontrolled  price,  of  all  ooiSnoditl2 

rllfLV  'i^-  "J-  ■."«»««  '»  "•  ol.  41-41 
Chemical,  and  drug.  (U.  S.):    price  fl^tua. 

*°<;o««l.  fj^  "«"'»"»"•.  30;  proflu.  67: 
(U.  S.):    control,  aij.  j6a;  profit.  j«i 
*i^%L  •««"«»«  of  l<ict;i»in  iit  if  llv. 
wtas?.'  '"^'  '''*^"  "'•  ■»""  ""-ti™. 

Chioan- Money,  Sir  L.,  6a. 

ChurchiU.  Winwon.  61. 

Clarke.  E.  A.  S.,  .84, 

Clothing:  * 

m"  ?•?  ■    ''^'■"*  fluctuatkm.,  33-34. 
ioi-i9o''aSt  """"•'lo".  «9I3-I9I8.  181. 
Clyne..  J.  R.",96.' 
Coal: 

(C.  B.):    prkc  fluctuation.,  1914-igi,    ,, 

Sw  Vll'TJ  »».=  fj'ix>'"'nent  of  Coal  c5n 
^M47:  Coal  ^fine. Control  Agreemrat 

OJ.  S."):  production.  a6a.  a7i;  price  flu'-ua- 
„„,«;.  '»"'"i»''-  »*3;  control.  364-  ;66- 
SS^ilu  '?!•  .fO'-'O*:  iobbem'  mirgiw 
a68-a69;  retail  price..  269-171;  reSedS 

prod«tion.    .73;    price    6xing.    ,73-a," 

rSS  'rr    n\-  '"'^  «u«uation..  at. 
^trS5:-,?i'=    """  """"•"on..  .,.  .4-,5; 

'"'i«;*p^fiM.5?7"  «"«•'"'«••.  "S,  .75-176, 

^"(G^RMg"'      ""''^  '"'°  ''«'''«f<»l  Unrew 

^"aT'ier*  *"''  "'"""'"'°"'  «tabUrtied  (G. 

^'':ri'o'i^&e^s'?u.'r,'"i",r '"  ^^ '"" 
SEr^"'""""'''^"^?s:.v/  f^  «■'•  "»- 

'^^f-.e?*™"""""""'  '"-"3:  "iticLm. 

'"mS-,'.  S?r*"  <^  ^'"'  »"<•  Navy  Depart. 
™""'  '"3;  agreement,  between  gowra- 
ment  and  producer..  104;  Lever  Food 
Control  Act.  106-109. 

M«'J";„!'-    •""*  "uctMtion.,  i8s,  aoi; 
control,  305.  aoi-294  • 

Copra  oil  (U.  S.).  control.  ai3. 

Com  Production  BUI  (G.  B.>.  isd-itt 

'"'ss^vy,t>-  ""^  '"'«™^'»s..9o, 


327 


Srt 


INPBX 


Cowodiviaci  ^  .  . 

(C.  B.)i    niMloii  bMwMii  prtcM  and  Mtn- 

laa.  U;  ohm  o(  InduMrtel  uiwot,  loi, 
(UTST)!    Uicfaun  la,  i«T-i«'' 
CotlM: 
(OTb.):    prtn  (hictiiatiafM,  14.  >»->il  I*- 
potu,  M:  proAu  d  cottoa  tfiliiiiint  cos- 
wnlM.  7i' 
WTs.):    pric*  lluctuatioiM.    Ks.   Mt-iW. 
joj:   pradiictlon.    i«t-aq«;   coiuumptlon, 
i«i,  joo;  control.  299,  J0.I:  eiporu,  joo: 
cMtaa  tebrkt,  to$ ;  cotloiiHcd  and  cottan- 
•ndoll,  iij,  JI7:  cotton  yarn.  joi. 
Cotton,  JoMph  P..  ass. 
Couruuld't.  Ud.  (C.  B.),  pioAta.  Ta. 
Cewi  (G.  B.),  ratrktlont  on  •laufbu-tni  of, 

SO* 

Canard  Company  (G.  B.),  praAta.  7J. 
Cardy,  iaj._    _  ,        ,  ,   . 

Cumncy  (G.  B.)i    apanakm  el.  cavn  o(  rin 

in  pricw,  J6i  IncfMM,  40. 
Cuatoon  duUM  (G.  B.),  cauie  of  Ugh  prion,  «i. 

Davmpert,  E.,  as*- 

Davenport,  U>rd,  109-110. 

DtbU,  total  national.  44.        j,  .      ,-    _  ,      . 

DacUnc  in  «!j»ly  U  comnHidlUM  (C.  B.),  4*- 

Dtpartmental  Committct  on  Prfcrn  (G.  B.).  S9- 

Pcatruction  t*  pruucrty  <G.  B.),  4«. 

DiatrtM,  abamca  ol  (G.  B.),  lo. 

DfM  foodt  (U.  a.),  ooBtrol,  >■]. 

Drink.    5m  Uquor. 

Duluth,  wheat  pricM.  aa4. 

EaMtm  Steel  Company,  a(4- 

Eaetman't  (G.  B.),  proftte.  js-    ^      ,  , 

BflKU  o(  Ufh  piicet  (G.  B.):  inoeaaa  la 
waaea.  Si,  14:  d«creaae  in  bankniptctee,  Ij; 
Improved  condition*  for  work  people.  T9-io. 
»a,S5. 

But: 

(G.  B.):    price  fluctuatione,  Ji. 
(U.  S.):    price  fluctuation*,  lis,    190;  con- 
trel,  a  I  J.  .       , 

Bsporu  (G.  B.):  fcitilctloM.  4*;  volume,  so- 
fa- 

Fair  price  li*u;    Great  Britain,  los;  United 

Sute*,  aifr-aiS. 
Farm  product*  (U.  S.),  price  fluctuation*,  191J- 

■91I1,  iSa. 
Federal  Trade  Commi*rion  (U.  S.).  asS- 
Feed*  (V.  S.):  control,  ai7. 
Feren*.  E.  R..  g6, 
FertiUier*  (U.  S.).  control,  ai7. 
Flan: 

(G.  B.):    price  fluctuation*.  a7:  proflu.  66; 

control.  141- 
(U.S.);    control,  aij.  ai7. 
/<Tui  (G.  B.):    price  fluctuation*,  ai. 
1  our:    S—  alao  GnJn. 
(G.  B.):    price  fluctuation*.  17;  tariff,  S9; 

Flour  and  Bread  Order,  130. 
(U.  S.):    United  State*  Miller*'  Committee, 
215:  control  of  the  mill*,  aag:  Food  Ad- 
ministration Milling  Divlaion,  aag;  price*. 
100.  339,  331,  3J3;  voluntary  agreement  01 
miller*,    339-3^0:  control  of  wholeialing 
and  retailing.  334:  efforU  to  prevent  hoard- 
ing. 334;  profiu,  3.14-335-  ^„  ^ 
Food  Adminirtration  (U.  S.):    establi*hment, 
309;  control  of  price*,  ao6,  aoo;  policy,  aio- 
ai8. 
Food: 

(G.  B.):  price  fluctuation*,  13.  14,  ai.  33; 
import*.  53-54;  mainter.ance  of  aupplin. 
58.  105;  quantity  available  in  1909-1913, 
57-58:  unequal  distribution,  cause  of  labor 
unrest.  loi:  control,  104;  appointment  of 
food  controller.  lo»-llo. 
(U.  S.):    price  fluctuation*.  I9i3-i9t8,  i8a. 


I97-I90    '°oi;  Food  Survav  or  Prodaetioa 
BiU.  106;  L«v*r  Food  Control  Act.  io6-<o«.. 

Fofd.  y/.  v..  17. 

France,  early  Waielation,  vio. 

Fivlgkt  and  ln«iranc*  rate*  (C,  B.)i  cause  of 
Uih  prlcaa,  S8:  rsstrlctloo*  on  ocean,  Ao. 

Fuel: 
(G.  •.):  price  fluctuation*,  jj. 
JU.  a):  prIc*  fluciuatloa*.  a6i:  Hitchcock 
raaoltttkm,  i«a;  appotatOMnt  o<  Fuel  Admin- 
iKrator.  a6s;  price  Aaini,  a6s-a«t,  JT4lJob- 
ban'  marftn*.  a«at  retail  prk**,  169;  cforta 
to  relieve  ekortan,  a7l-a7S;  production,  J7J. 

Fumiture  and  furtUdac*  (U.  8.),  IK,  Ml. 

Gaiveaton.  wheat  price*,  Jt4- 

Garfldd,  H.  A..  aa3.     . 

GaaoUne  (U.  8.),  price  fluctuatiena,  i*s. 

Gary,  judge,  aSj,  384-    .  .,  „  , 

General  Munition*  Board  (U.  S.),  ao4. 

GIrondin*,  I. 

Gold  (G.  B,):  effect  of.  on  price*.  40:  e«i- 
nated  amount  in  United  Kingdom.  June  jo, 
1914,  40. 

Gold,  world  production,  40. 

Gate,  Thoma*  P.,  J06,  334-  ^     .^ 

Governmental  control  and  price  flmnt: 

(C.  n.):  fair  price  lieu,  los;  UnreaaonabW 
WlthhoMlnt  of  Food  Suppiie*  Act.  107; 
Cabtaet  Committee  00  Food  Supiaie*,  107: 
Royal  Sugar  Committee,  to*:  Board  of 
Trade,  authority  of.  108:  appaintment  at 
food  controller.  109-iia:  Artkle*  of  Com- 
nerca  Act.  107;  food  control  committee*. 

(U.  S.°):    National  Defenie  Act.  303;  Lever 

Food  Control  Act.  306-309:  fair  price  lists, 

3i6-ai8:  reaaon*  for,  31*;  reaulu.  319-330. 

Grain:    cariy  legialatlon  in  France,  8;  control 

(U.  S.).  I3V-I3I:  U.  S.  Food  Administration 

Grain  Corporation.  336-338. 

Gravel  (U.  S.),  control.  305. 

Hagao,  I.  M„  aaa. 

Ham  (U.  S.),  price  fluctuation*,  185. 

Hanna,  Hugh  S..  194...  ,      . 

Hide*  and  faither  (U.  8.),  price  fluctuation 
18s,  307;  control.  30s.  30*. 

Hitchcock  resolution.  363.  __     ^ 

Hoarding:  ky  consumer  (G.  B.).  63;  provielon 
aciinst,  by  dealer*  <U.  S.).  316. 

Hoi*  (U.  &):  price  fluctuation*.  18]:  produc- 
tion. 349-iso;  *timttlallan  of  production,  as  i ; 
control,  353. 

Holkiw  tile*  (U.  S.).  control,  aos. 

Homer.  W.  S..  384. 

Hop*  (G.  B.),  price  fluctuation*,  ai. 

Hoover.  Herbert,  aio.  311,  336,  331,  341.  343, 
318. 

Hou*e  of  Common*  Select  Committee  (G.  B.), 
inveetigatlons,  44-  ,    , 

House  furnishings.  5m  Fumiture  and  fur- 
nishings. 

Housing.    5m  Rents. 

Houston.  David.  61,  307. 

Hutd.  A..  49- 

ImporU  (G.  B.) :  volume.  SO-S3-  5*;  table.  56; 
incrcaeed  coat  of.  54-55- 

Income  taxes.  1914  and  1917  (G.  B.),  71. 

Increaied  consumption,  cauie  of  high  prices,  45. 

Indigo  (G.  B-).  price  fluctuations.  13- 

Inflation.  cause  of  hi«h  prices.  36-44.      ,  ,_,  .^ 

Insurance  and  freight  rate*:  cause  of  high 
prices,  5»;  <-o«t  of.  against  war  risk,  63- 

Iron  and  steel  (U.  S):  wages.  196;  price  fluc- 
tuations. 378-37'i  385;  pig  iron.  379;  control, 
305.  379-383.  380-289;  profits.  383:  confer- 
ence between  government  and  producers. 
387-388. 


IKOff- 


329 


Jmm  (U.  ■.),  cMrtmL  Ml. 

Jotiit  MMk  UMtmafaiifi  (G.  ■.).  Mnila«t  iK, 

Jaorul  o(  Koyml  Itatinie^  Soctxy,  M,  6f. 

lUiMM  City,  wheat  piteM.  tj4.  i,;, 

Uhof !    St  abo  Wian. 

;."IiiJ!f*"  "•  «»«»ton  on  pradiKtloa. 
4i,  jWpliliH.  toi  UMffiptoymmi  M  out. 
bi«»ko<  WW.  Tti  payiMiita  to  Idle  work- 
««<  on  Mtount  o<  cotton  mtrktin  ofder. 

Jo:  ncnn«4  dnnand.  li ;  incmwd  wmm, 
•  II  Improved  condlllona,  Hi;  coat  of  UvIm. 
■•.  01. 

(U.8.1!    Co*o<UTlnf.  »oo;rtrecuo«hl«her 
wacce.  joa. 
Uhor  unrot  (C.  B.):    inde  diapum,  »».  07; 
'^^S-  ?*'V'  ""■  ■m'Mtltatlons  ai  brit&h 

S'lSX.'SS"  •'*^"»«"  o*  com«l.-oo 
Lackawanna  Steel  Co.,  >l4. 
Lamb  (U.  8.),  price  fluctuationa,  igo. 
Lambert,  George,  55. 
Lard  <U.  S.) :    price  fluctuaUona,  lis.  i«o:  coo. 

troi,  J I  J. 
Lauck.  8.  Sett,  194. 
Law,  Bonar,  T4.  U4. 
Laweon,  W.  R.,  ti. 
Layton,  W.  E..  11$. 
Lloyd  Cieone,  Oavld.  100, 
Lead  (C,  B.),  price  lluctuationi,  31. 
Leather  (U.  S.):    price  fluctuation*,  iSj,  joS: 

control.  ao5,  jo*-jo9. 
Leaidatlon: 

Early,  In  France,  ft-o. 

"•i"'i,   I'l^awnable Withholding o*  Food 
5X1'^'? „'^'^'-."";  retarding  meat,  iji: 
Price  of  Coal  Llmlutkm  Act*  145. 
(U.  S.):    early    10;  National  Defenee  Act, 
>o3:  Lever  Food  Control  Act.  ja6-jog 
I     J'«' So'V'T  or  Production  Bill,  J06. 
Lrpplngton.  C.  H.  d'E..  It. 
Lever  Food  Control  Act  (U.  S.1,  >o6->o9. 
Ucenaing  lynem  and  control  oi  margin!  (U.  S.) 

Light  (G.  B.I,  a, 

Lineeed  (G.  B.l.  price  fluctuatlone.  13. 
Upton.  Ltd.  (G.  B.).  proliti  oJ,  76. 
Liquor  (G.  B.l:    price  fluctuation!.  11,  ila. 
London  itora'  profiu.  74-76.  «5-«6. 
Lough.  E..  i>4. 

Lumber  and  building  material!  (U.  S.) :    nrice 
fluctuation!.  i«j.  311;  control.  105,  311-312; 

McCumber,  Porter  J,.  aj4. 
McKenna,  R..  36,  66,  iij. 
Manila  fiber  (I!.  S.l,  control,  303. 
Manufacture.  (G.  B.),  import!.  53-34. 
Material,    raw   (G.    B.):    price  fluctuation!. 

H-14;  Import!,  J3-54. 
Meat: 
(G.  B.l:     price  fluctuation!.  19.  }5;con.ump- 
tion.  46;  cauK.  of  ri!e  in  price.  50;  incmue 
;!L'T"  °"'  "*  proportion  to  lncrea«  in 
freight  rate.,  61;  profit.,  68;  control   111- 
135 :  quantity  available.  150. 
(U.  S.I:     price  fluctuation.,  lao;  production 
249;  control.  213.  254-155;  Meat  Division 
><    °J  Food  Adminutiation.  255;  profiu.  255. 
Merchant!  Committee  of  London  Chamber  of 

Commerce,  165. 
Mercury  (U.  S.):    price  fluctuation..  294:  con- 
trol, 294. 
Metal,  and  metal  producu,  price  fluauationi: 
Great  Britain,  21;  United  State..  i8a. 


MIfti 

.iJ?'»'^"  flucluatloB.,   j«:  eon>ump. 
Uon,  4»;  cauie.  of  high  pricta.  40;  proflta^ 
b»-«7:  coflirol.  iiv-i>3. 
(U.  8.1:     price  fluctuation..   I»j,  100.  2t«. 

»IT;  Milk  Producer.'^ A!«idailo«.  Jsb-jiT 
Mineral.  (G.  B.l.  pr«c»  fluctuationa,  11-14.  jo. 
MInneapolu:    wjwat.  224;  flour.  229. 
Money.  goM.  silver  and  uncovered  paper,  la 
mSu"  M^      *"  «*'"'''»'  co-ntrie^iir 

*'l'!i*!°^' ,  t^"  "♦  *"»•  '"  f».  ■ .  »J;  con. 
trot  In  United  State..  203;  United  Stale.  Gen. 
•ni  Munitiona  Board,  1104. 

National  Aendation  of  Sheet  and  Tin  Plata 

Manufacturer.,  2I4. 
National  Defenw  Act.  joi. 
National  Trade.  Union  Conam.  (O.  B.l.  103, 
N»l^a^  I'nion  of  Railway.  Vmpto?^?i>''' 
Nailonaltellon    of    ladu«rie..'dimand    for 

(G.  B.l.  91. 
Nayle  Steel  Co..  214. 
New  Orlcnn..  wheat  prkee.  224. 
Nrw!print  paper  (U.  S.):    price  fluctuation!. 

315;  control,  31S  317. 
New  \ork:    percentage  of  increaee  In  coet  of 

living.  Joi;  wheat  price..  224. 
Nicholson.  Prof.  J.  S..  3*.  71. 
Nickel  (U.  S.(:    price  fluctuatkm..   204:  con- 

„«n>l.  205.  29J. 

Nitraieof  soda  (U.S.I:    production.  300,  price 

fluctuations,  306,  control,  306. 
Nitnc  acid  (U.  SI:     price  fluctuation.,  305: 

control.  205.  306. 
Note,  and  certificate.  outMandIng  (G.  B.l.  ji, 

Ctakland.  percenUge  of  Increaie  In  com  of  living. 
Oau:' 

(G.  B.l:    Oat.  and  Malie  Products  Ordcra 
131;  control.  U4,  136;  area  under,  ijr. 

(U.  S.l:    price  fluctuations.  iSs:control,  213 
Ocean  freight  rate.  (G.  B.l.  InrreaMd.  59. 
Oleomargarine:    Great     Britain.    31:    United 

States.  213. 
Omaha,  wheat  prices.  224.  227, 
Onion.  (G.  B.l.  control,  141. 

Palsh,  Sir  George.  54.  62,  (4. 

Patgrave.  Sir  Inglis.  38. 

PalmOIKU.S.!,  control.  213. 

"per  (U.  S.l.  price  fluctiutions.   1913-101S, 

Paup^.m  (G.  B.l:    decline  of,  79;  table,  »o. 

Peabody.  F.  S..  264. 

Peanut  oil  and  peanut  meal  (U.  S.I.  control. 

_  »'3. 

Pea.:    Great  Britain.  140:  United  State..  213. 

Petroleum:    Great  Britain.  21;  United  Sutee, 

■  Us.  377. 
Philadelphia:  perrenugeof  Increaee  in  co.t  of 
„ .living.  Joi;  wheat  price!.  224. 
Phillips.  Marion,  102: 
Plg^lron.  lead  and  tin  (U.  S.l,  price  fluctuations. 

Pigou!  A.  C.  Prof..  38. 

Pig!  (G.  B.l.  number.  158. 

Platinum  metals  (U.  S.l:    control.  296-20T. 

Populauon   (G.   B.l:    food  requirement!  for. 

57;  ha!  remained  stationary.  58. 
Pork  (U.  S.l.  price  flu.:tuation!.  185. 
Potatoee: 

(G.  B.l:    price  fluctuations.  31;  profit!.  66- 

...control.  123-129.  156:  area  under.  157. 

(U.  S.l.  price  fluctuation!.  185.  loo. 
Poultry  (U.  S.I,  control,  213. 
Pretyman.  E.  G,,  4S,  61. 
'^^   Fialng    Committee   of   War   Induetrit. 

Board  (U.  S,),  205-306. 


MO 


IIOWX 


KM  al  WalM  Piiad  (C.  ■).  Tl. 

Mm  laurptMaa  tiMfda  tV  S.).  ii»-iit. 
^ — ^nctiem 

B.)i     blih  COM*  of,  47  ««,  quanllty  of 
haiM.  SI-  il;  Mbl*.  sA- 
(U.  •.):    ••rmMdU  twtwnn  tonnwMM 
Md   predwcn,  Jim  wImm,   119;   

Pradaction  al  woti,  wotii,  40, 


(G.  B.):    MmiMhlp  linn,  As;  remit  tathtr 
IkMi  csuw.  <t«.  ia  (aadataa*.  «»-7o   ocmm 
praAU  ui  iMttnt.  71:  Mflilnc  »(  )o<ni 
Mack  caaiiMMcs,  ;i,  Laadoa  w  >m  pro- 
ma.  74-7B:  labor  unrctt  a?, 
(V.  8.).  conirui  of.  >i4-iis. 
Piatharo.  G.  * ..  iit.  154.  16^ 
Fubllc  Ai'couiiu  lommUlNF  (C 


tlaof  ?! 


Piilw  ((•   HI.  comroL  140 
ftichaar  pt    '  di«ar<l  (U. 


B.),  invtitlaa- 
r.S.),  ]i4. 


JulckiUvtr  lU.  S.  > ,  control,  lof, 

RabMU,  wild  (G.  1     .  control,  141. 

Rau  (U.  S.),  conlrol,  loj. 

RatiOBlaa  tn  Unltnl  Sut«.  obicctiaat  to.  itt. 

RccUtw  Buirlnt,  caiue  of  rijc  In  pntm,  47 

Baid.  JaoMa  A..  »6. 

Raviadt, J.  L..  117. 

BaaUs    Grvu  Britain,  n.  Unitad  Stata*.  I9j, 

KrallPrlc'n: 

(G.     B.):     pric*    fluctuation*.     14;     Retail 
Prlcea  Order.  140; 

(U.  S.):    fluctiiationi.  iM-igj. 
Rhoadda.  Lord.  }6.  in. 
Rica  (U.  S.).  control,  iij. 
Roaniwald.  Juliua,  104. 
Rout,  Jacquei.  S. 
Rayalaocfety,  inve«i(atlon>  ct.  S5-s6. 

(G.  B.):     price  fluctuatiora.  11. 

<V.  S.) ;    production,  jog;  price  fluctuati..,n<. 
iti,  300;  control,  jio-jii. 
Runciman.  W.,  36.  4S.  61. 66,  lii.  is6. 
Rye  (U.  S.),  price  JIuctuationi,  I8j;  con'rol, 

tia-aij. 

St.  Unlit,  wheat  price*.  >a4. 
Sand  (U.  S.),  control,  aoj. 
San  Fmndaco,  percentage  of  increaie  in  coat  of 

living,  aoi. 
Scott.  Frank  A.,  10s. 
Seattle,  percentage  of  increaaa  in  co«  of  hvifiu 

MI. 

Selbome.  Lord.  I5J. 

Selling  price  defined  (U.  S.).  214. 

Shadwdl.  A..  65. 

Sheep  (G.  B.).  number,  is>. 

Shippini:    5rc  oijo  Tonnage. 

(G.    B.):     destruction.   49;    control.    60-61; 
prolVu.  73-74. 

(IT.  S.) :    control  of  1  -  ico  of  ihip*  and  mate- 
rial* for  navy.  303. 
Shoe*:    Great  Britain.  34.  73;  I'nited  Sutet. 

lis. 
Silver  coinaae  (G.  B,).  net  latura  of,  30. 
Smillle.  Robrrt.  lo]. 
South  Wal<^!l   Commivtionem  of   Inquiry   into 

Indu*trial  Unreal  (G.  B.I.  rx). 
Soya  bean  oil  and  meal  (U.  S.).  control,  213. 
Spelter  (l     K.i,  price  fluctuationa,  18s. 
Spokane,  percentage  of  increase  in  cost  of  living, 

201. 
Stanley.  Sir  Albert,  149. 
Steel  (V  S.;.     price  fluctuaiions.  1  As;  wages  in 

plants.  ig6;  controi.  205.    Set  otso  Iron  and 

Steel. 
Stockyards  (U.  S.».  control.  217. 
Store*  (G.  B.).  praAts  of.  74-76. 


SttacM*.  UHl,  IJ«. 


'^r^B.) 


pck*  Buctnatlon*.  is-fj.  t»-n; 
taa  as,  it;  appaimnient  o(  Rnral  llugiw 
Coi»l*alnn.  i0g;conlnt.  114. iiu 
(U.  &I  I  traduction,  137,  147-141 ;  causa*  al 
■Bttii*.  aj7-(jl.  a4i-24J;  psic*  lluctua- 
tlona.  Iks.  190,  ajl-a4 1,  control,  aia-aii, 
Ji«.  a}^ai9.  8a»u  DtstrihatlM  Commit- 
lOT,  *40;  Imenialloiial  Suaar  Committ**, 
a4o:  Amrican  Raflaar*'  Cemmlltee,  240; 
lalioolng,  a43-a46;  Sagar  Kqualiiittioo 
Boaad,  a4S ;  conaaaiptloa.  a46;  profits  ,146; 
natrtctlon*  on  sal*  of .  116. 


Sulntrarlc  Add  (U.  S.) :    i>raductioa.  307;  pcic* 

fluctuatloti*.  307;  controi.  ao],  307. 
Supply  of  cooimadltl**  (G.  B.).  41. 


IHraata  (G.  B.),  control,  141. 
Sykaa,  A.,  as4. 

Table*: 
(C.  B.li  Monthly  flttctH<itk>ns  of  ladai 
number*  of  rommodltie-  is;  whoi**ala 
ptlcM  of  cominodllic*  from  June.  1914.  10 
D*cemb*r.  1917  16;  comparison  of  waraad 
(wvwar  annual  itMlex  number*.  17;  compari* 
wm  of  war  and  prewar  monthly  index  num> 
'  en.  17;  ebowing  advance  in  priceeof  com- 
..aoditl**,  It;  rite  <hown  by  K-iard  of  Trad* 
index  number*  01  wholesale  price*  "f  47 
artid**,  at;  fluctuation*  of  yearly  avr^aii 
wholeeale  price*  of  commoditi**,  22-23; 
showing  per  cent  of  incriaae  in  certain  wro- 
cle»  since  July,  1914,  3a;  avera«e  percent- 
age I'irrease  in  prices  of  clothing  betwiva 
July  1914.  and  Sepwmber,  1916,  34; 
wortr!  production  of  gold  sincr  1906,  40; 
yearly  returns  of  foreign  tradr  shippini 
$t,  imtKjrts  an.l  exports,  si;  volume  ot 
trade.  5  t;  analyxis  of  individual  group*  of 
Irapon-  (or  1916.  j  1  quantitie*  of  food 
!aateri~%ls  imported  I  home  produced. 
]6;  co-nparatlve  tab);  >f  praAt*.  7a;  net 
pioflt^  (it  London  storf^.  74;  unemploy- 
ment .-nnng  trade  unionists  in  1900-1917. 
79;  nuMiher  of  pauiwrs  in  receipt  of  poor 
relief.  ^  rise  in  cost  of  living  and  reduced 
purcha-  14  powrr  of  sovereign  spent  on  food 
in  V.  K..  durinii  the  war,  Sq;  schedule  of 
mailnium  wholesale  meat  prices,  i.t.l;  pro- 
duction of  coal.  iglj-igi7.  144.  crop  acre- 
age of  Knglanit  and  Wales.  I  $7 ;  average  yield 
of  CTo\i^  per  acre  for  England  and  Wale*. 
158;  (lujrterly  movements  of  prices,  173; 
prices  at  end  of  March  quarter,  1914-191S, 
174;  growth  of  national  debt.  175;  acreage 
under  crops.  176;  number  of  livestock,  177; 
estlmatril  crop*.  177. 
(U.  S.);  index  numbers  of  wholesale  price*. 
I9i3-><>i8,  181-1S2;  movement  of  whole- 
*ale  prices.  183-18S;  index  numbers  .if  all 
commodities.  1916-1Q17.  187;  extent  of 
price  fixing  in  September.  :«l8.  i8»;  index 
numbers.  September.  i<jis,  188;  average 
money  retail  prices  and  ixr  cent  of  increase 
or  decrease  June  is  of  each  speciiied  year 
compared  with  June  is.  lyi  1.  189;  relative 
retail  prices  of  food.  1913-i'jiS,  i9o;average 
and  relative  retail  prices  ot  .ual  in  ton  1  )ts 
for  household  use,  192;  relative  wagr^tin 
leading  occupations,  1917.  compared  with 
1914-191S,  19s;  purchasing  tx^wer  of  wage* 
meamred  by  retail  ;)rices  of  food.  197;  the 
nation'*  food  bill.  198;  estimated  working 
man'*  budget  in  loii.  1914  and  1917.  a* 
compared  with  «90o,  200;  wheat  price*. 
23 1 ;  iron  and  steel  prices  in  dollars  per  gross 
ton.  285;  list  of  comnuxlities  the  price  of 
which  was  brfiught  under  Kovtrnment  con- 
trol, 321 :  official  V.  S.  Food  Bulletin.  323- 
324. 


INDRX 


*^»r*'  *••«"•*'•  •*  '«""•  1"  COM  of  llvlac 

Tm  (O.  B.):    prict  HuctmtkMM.  u.  tt-it  il 
*U(Si'jS™"  •  '^'^  "^"'  *^""^ 

Iti  Brtuta.   ii;   Lnit«l  suu., 

'•oni»,t<GJ.),    •hofttg.,3»;i*rrtoj*oft. 
j««  OB  ptoductloii,  4g,  pricM  |»I<1  by  CnM 

Tr»d.  (C,  4  i.  41,  ,o-w. 

Un«np4oy»n,i  (C.  B.).  inrttu.,  on  outbrnk 

Unitwl  SUM.  St««l  Corpcmilon.  j»j   -»4. 

Vttrirt,  I. 

V^Ubl.  food  (C,  B.).  pricr  flucttt.»loi», , j-,4. 

Wan.: 

OTMe  In  prici  of  Mcnatlca,  Ij,  cauK  o( 


331 


hijh  priCM.  »i. 
(L-  S.),  flucluiuioni  in,  194-197, 


W^MI; 
%rir  htlabtkMi.  6. 

•floru  to  mcrwM  pfoduclU«.  isi^  contnMi 

'im^  rontrol.  iii  jij.  prodiKiUfp  119, 
AUlM)  nnxti.  119.  i.rlcm.  Hj.  jj,  ,,, 
•cftM»,    iJi     Lommutt*   of  Grain    Cxi 

rood   AilniinlMnwIon  ('.rain   Corporatlua 
„~  ,  "'^"•.  contumpilon.  ti». 
Mlilik«v.    .S«  Liquor. 

w^"i"T.'^!)'i-  "  '■  ">cr««.  in  number,  to. 

^TSfi^ii  '^'  **'•  ""'•  "««<»«'<»<••■  '»u- 

lluclu»llon.,  im.  j„,,  control,  joj. 

.^.I'i."  n'.Vi"""',"".'*^-  "'■     'nv«ll«.llOB., 
..."'J"-  "»'^>n«l  i<>nf»r»nrf.  u7. 
Workington  Iron  and  Sled  (G.  B.),  profits  of. 

Worlinwij  (G.   B.);    condition  of,  7«,  »•;  in. 

•i'tSr*"  ***"  **'"*  ""'  '"  "''"  '*  "*"*■ 


»* 


